Formation of climate agreements: the role of uncertainty and learning

Abstract

This chapter addresses the impact of uncertainty and learning for the success international climate agreements. The analysis is based on a simple a stylized coalition formation model, considering three learning scenarios and three types of uncertainty. We show, different from previous studies, that the “veil of uncertainty” is generally not conducive to the success of international agreements, even in a setting of strategic interaction. That is, we find that, usually “the more we learn the better it is”. Moreover, for those cases where more information leads to less successful agreements, we propose a mechanism to mitigate the negative impact of learning.