A theory of global public goods and their provisions

This paper develops a general theory of a global public good and its optimal provision. In a national public good problem that researchers have long been acquainted with, government taxation and public expenditure are an inevitable tool for an optimal provision. This paper shows that an efficient provision of a truly global public good through public taxation and expenditure becomes unattainable because of nationally disparate incentives, especially given large uncertainties about the future. This paper describes two alternative approaches. One is a technological solution, which is a high promise but has unresolved issues of uncertainties with regard to developments of necessary technologies. The other is an adaptation framework. This paper shows that the provision of a truly global public good becomes manageable through a framework of adaptation strategies as it overcomes both divergent national interests and uncertainties with regard to needed technologies. Adaptation strategies would unfold triggered by changes in private incentives over a long‐term time horizon in a private–public partnership. Copyright © 2016 John Wiley & Sons, Ltd.