Prof. Dr. Carlo Gallier from THI Business School has published a paper together with Prof. Dr. Axel Ockenfels from the University of Cologne and Prof. Dr. Bodo Sturm from HTWK Leipzig in the Journal of Economic Behavior & Organization.
The study addresses the question of why the Paris Agreement has so far failed to generate ambitious climate contributions and how it would need to be designed to achieve the 2 °C goal. To this end, the authors combine economic laboratory experiments with simulations and examine two key features: the Paris Agreement’s ratchet-up mechanism, which requires countries to gradually increase their nationally determined contributions, and a new proposal to increase the frequency of interactions in climate negotiations.
The results show that more frequent interactions can allow mutual trust to build gradually and with lower risk, thereby promoting cooperation. In contrast, the ratchet-up mechanism proves counterproductive: participants tend to act more cautiously in order to protect themselves against potential free riders.
The study concludes that more frequent interactions can strengthen international climate cooperation, while the ratchet-up mechanism does not achieve this goal to a comparable extent. The findings provide important insights for future international climate negotiations, such as the current policy proposal to submit and discuss parties’ nationally determined contributions more frequently.
