The CORE project will apply four types of methods: 


  • Cooperative game theory will be employed to develop a model reflecting the main features of current climate negotiations which will be the basis for the subsequent analyses. This includes the definition of the players of the game and the definition of the value function (i.e. the cooperative result that every possible coalition can achieve). In contrast to non-cooperative game theory, which investigates the strategic interactions between countries during the negotiation process, cooperative game theory solely focuses on the outcome of a negotiation, while ignoring the process necessary to get to such an agreement. Therefore a cooperative approach is chosen in this project to characterize an agreement on climate change that renders cooperation between the parties possible. The solution concept chosen is the core, which in this context refers to the set of international agreements that are feasible for all countries and do not give a smaller coalition of countries an incentive to reach a different agreement. To be able to analyse the influence of uncertainty on a possible cooperation new methodological approaches will be applied that include uncertainty in a cooperative game setting.
  • A computable general equilibrium model (CGE), which captures the key features of climate policy will be run to parameterize the value function for the cooperative game and to carry out detailed policy analyses. To do so, the DART model will be extended to account for uncertainty related to different development paths for key mitigation technologies (e.g. renewable energy technologies, carbon capture and storage).
  • A field experiment will be conducted with actual stakeholders in the climate negotiation process to raise awareness and to explore possible differences in bottom-up and top-down negotiation processes. Results from CGE modelling are expected to be used to specify the experiments.
  • A controlled laboratory experiment will be carried out with students to test predictions derived from the theoretical model. The design will allow bottom-up and top-down negotiation processes to be examined and compared. The outcomes of the experiments will be analysed with standard statistical methods. Findings from the laboratory experiment will also be compared to outcomes from the field experiment.

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