Economic approach to climate policies and stakes of international negotiations

Abstract

This article deals with the different modalities that exist to manage a problem of collective action facing the climate change problem, which could affect the living conditions and economic activities of all the regions of the world. Economists are doubly concerned by this danger, first, in terms of defining response policies, second by the way of producing a public good. In the first part are reviewed some of the principles and methods of the economic approach to these subjects: (i) the debate between Cost-Benefit Analysis and Cost-Effectiveness Analysis, (ii) regulation by prices or quantities and the way models use environmental economics tools that are taxes, tradable permits, norms and standards and hybrid instruments like standards and charges or safety valve, (iii) use and limit of economic models in international climate negotiation. The second part uses the concepts of the International Political Economy for studying the process of organising joint action at the global level that is finding a governance model for the global environment. It uses the concepts of international regime and of leadership and defines the principal rules and institutions of the existing international agreements, with their achievements and weaknesses. It finally identifies four scenarios for the future of collective action.