Technological development of low-carbon power technology and stability of international climate cooperation

This paper explores how the technological development of key, low-carbon power technologies (photovoltaic, wind and carbon capture and storage) influences the stability of global climate cooperation under different assumptions about climate-related damages. The methodology combines cooperative game theory with a global computable general equilibrium model. Global cooperation is found to be stable only under mean or pessimistic assumptions about the development of key low-carbon power technologies and when damages are high. If the technological development is optimistic or climate damages are lower, the gains from global cooperation are not sufficient to compensate for mitigation costs, because a non-global coalition of willing countries can then achieve emission reductions close to the global optimum.