The coalition of the willing: Effect of country diversity in an environmental treaty game

It is analyzed how size differences among countries affect the benefits from climate coalitions. It is shown that size differences lead to smaller coalitions and greater benefits than coalitions among identical countries. The importance of trigger strategies for supporting cooperative solutions is considered. A real world example, based on the world’s six largest emitters, is used to illustrate the implications of size differences in terms of emissions versus valuations of benefits. Climate coalitions become smaller when ranking in terms of benefits is different from ranking in terms of emissions. Three cases of benefit valuations are considered: benefits equal (i) share in world emissions, (ii) share in world GDP, and (iii) share of world population.