requires reducing net GHG emissions globally to zero,<sup>6</sup> reducing every country’s emissions would become pivotal to the collective effort to avoid catastrophe. Every country would thus have a strong _individual_ incentive to limit emissions, so long as it were assured that all others would reduce their emissions as well. In the face of a highly probable catastrophe, such mutual assurance would likely develop as countries visibly changed their GHG‐ emitting behavior, with negotiations focusing more on coordination of efforts than on the sanctioning of backsliders.

In practice, however, the climate change problem is more complicated. The risk of severe or catastrophic climate change remains quite uncertain as to the mechanisms and potential timeline of occurrence.<sup>7</sup> More gradual and still uncertain climate change damages occurring over a longer period are less likely to galvanize an easily maintained collective response. The reduction of each country’s GHG emissions would not be pivotal to mitigating risks.<sup>8</sup> In this situation, individual countries will see limited benefit to reducing their own emissions in the absence of international agreements that provide adequate assurance of effective participation by others.<sup>9</sup> Moreover, benefits would be realized mainly in the longer‐term future, thus reducing their salience relative to more immediate concerns. Indeed, individual incentives to act will depend to a large extent on how the current generation views its interests in, and its obligations towards, unknown future generations facing uncertain baseline circumstances. Further complicating this international distribution issue is that per capita benefits relative to income likely would accrue more to poorer states that can do relatively little to reduce global emissions in the near to medium future.

The incentives to reduce national emissions also depend on the anticipated cost – the higher the cost, the stronger the incentives to free ride. There is considerable debate over the cost of emissions reduction, depending on a variety of analytical assumptions and judgments. As one rough guide to the costs, the Intergovernmental Panel on Climate Change (IPCC) indicates in its Fourth Assessment Report that stabilization of GHG concentrations below a doubling of pre‐industrial levels could cause global GDP in 2050 to be roughly 5% below its baseline value (Fisher, Nakicenovic et al. 2007).<sup>10</sup> The IPCC figures also reflect ideal conditions for policy implementation. If more realistic assumptions of less

> 6 “Net” emissions means total emissions minus those withdrawn by natural or human‐engineered sequestration, and the natural breakdown of GHGs in the atmosphere over time.

> 7 For a review of policy implications of catastrophic climate change, see Kousky et al. (2009).

> 8 For at least some moderate degree of change, moreover, there can be both winners and losers even if the aggregate impact is adverse. See, for example, Cline’s (2007) analysis of agricultural impacts.

> 9 One factor that erodes the benefits from cutting emissions without broad participation by other countries is various forms of international emissions “leakage.” If a subset of countries reduces emissions, this will tend to lower the relative cost of GHG‐producing activities in other countries, inducing _their_ emissions to increase. Similarly, if one group of countries reduces its consumption of internationally traded fossil fuels to cut its emissions, international prices of these fuels will fall, causing other countries to increase their consumption and emissions.

> 10 See also Stern (2007) and Nordhaus (2008) for significantly contrasting estimates.

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