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Tit-for-Tat Dynamics in Greenhouse Gas Mitigation

Levenstam, Truls LU (2025) NEKH01 20251
Department of Economics
Abstract
In this text we develop a model of countries deciding on mitigation levels of CO2 in a tit-for-tat manner. Taking key ideas from earlier papers, we construct a payoff framework which describes free-riding incentives and which assesses the utility of countries' discounted future output - an output which is reduced by both abatement costs and climate damage. We then, by means of a differential equation, formulate a tit-for-tat interaction played out over time, and couple this interaction to temperature changes in a dynamic way. We look at settings in which abatements neither are fully cooperative nor non-cooperative - but lie somewhere in between these - and investigate the stability of the systems equilibrium points. We find conditions... (More)
In this text we develop a model of countries deciding on mitigation levels of CO2 in a tit-for-tat manner. Taking key ideas from earlier papers, we construct a payoff framework which describes free-riding incentives and which assesses the utility of countries' discounted future output - an output which is reduced by both abatement costs and climate damage. We then, by means of a differential equation, formulate a tit-for-tat interaction played out over time, and couple this interaction to temperature changes in a dynamic way. We look at settings in which abatements neither are fully cooperative nor non-cooperative - but lie somewhere in between these - and investigate the stability of the systems equilibrium points. We find conditions providing both stability and instability in models with two countries. We find that stability is fostered by an equal unabated carbon footprint, and by similar economic exposure to warming. The strongest result regarding instability is that both temperature and the rate at which carbon sinks absorbs CO2 potentially plays pivotal roles in pushing an equilibrium into instability. (Less)
Please use this url to cite or link to this publication:
author
Levenstam, Truls LU
supervisor
organization
course
NEKH01 20251
year
type
M2 - Bachelor Degree
subject
keywords
Climate change, Tit-for-Tat, Mitigation of Greenhouse gases, Long-term economic development.
language
English
id
9215695
date added to LUP
2025-12-08 08:35:04
date last changed
2025-12-08 08:35:04
@misc{9215695,
  abstract     = {{In this text we develop a model of countries deciding on mitigation levels of CO2 in a tit-for-tat manner. Taking key ideas from earlier papers, we construct a payoff framework which describes free-riding incentives and which assesses the utility of countries' discounted future output - an output which is reduced by both abatement costs and climate damage. We then, by means of a differential equation, formulate a tit-for-tat interaction played out over time, and couple this interaction to temperature changes in a dynamic way. We look at settings in which abatements neither are fully cooperative nor non-cooperative - but lie somewhere in between these - and investigate the stability of the systems equilibrium points. We find conditions providing both stability and instability in models with two countries. We find that stability is fostered by an equal unabated carbon footprint, and by similar economic exposure to warming. The strongest result regarding instability is that both temperature and the rate at which carbon sinks absorbs CO2 potentially plays pivotal roles in pushing an equilibrium into instability.}},
  author       = {{Levenstam, Truls}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Tit-for-Tat Dynamics in Greenhouse Gas Mitigation}},
  year         = {{2025}},
}