Benefits, Costs, and Cooperation in Greenhouse Gas Abatement

Abatement cost and benefit projections through 2100are computed, assembled and interpreted with respectto various levels of emission reduction. Mathematicalexpressions describing regional costs and benefits asa function of abatement strategy are developed. Usingthese data and expressions, optimal abatementstrategies are defined for noncooperative andcooperative (Pareto optimal) policies. Thecooperative solution calls for an average emissionsreduction of 16.6 percent over the 1990–2100 period,as compared to 5.8 percent in the noncooperative case. Achieving the cooperative solution would require sidepayments to China and potentially to the U.S., as wellas stringent (though beneficial) restrictions onnon-OECD countries. It is argued that Paretooptimality is technically achievable but possiblyinfeasible in the real world.