Seminario LAERE-EfD: A Unifying Theory of Foreign Intervention in Domestic Climate Policy

Abstract: Given the global nature of the climate and the economy, climate policy that meaningfully reduces the impacts of climate change will require collaboration between sovereign nations. Characteristics of climate policy instruments, however, have made collaboration difficult. For example, emissions cuts suffer from a free-riding problem while solar geoengineering suffers from a free-driving problem. Foreign countries have at least three options to intervene in domestic climate policy in a Target country: i.) Agreement Interventions, such as international environmental agreements; ii.) Policy Interventions, such as rewards or sanctions; and iii.) Institutional Interventions, such as conflict. In this paper, we derive a theory of climate policy-motivated foreign intervention. We distill the fundamental properties of different climate policy instruments into a simple parameterization and examine the incentives and preferences of each foreign intervention option. Specifically, we consider intervention
preferences for climate policies that suffer from free-riding or free- driving. We find that the ordering of foreign intervention preference depends critically on the parameters that determine if a policy suffers from free-riding or free-driving.

Short-bio: Juan Moreno-Cruz, Canada Research Chair in Energy Transitions at the University of Waterloo and Associate Director of the Waterloo Climate Institute, holds a PhD in Economic from the University of Calgary, a M.Sc. and B.Sc. in Electrical Engineering from the Universidad de Los Andes. His work analyzes the role of disruptive technologies, such as solar radiation management and carbon dioxide removal, in addressing climate change. He is a highly interdisciplinary scholar with work expanding economic valuation, policy design and evaluation, as well as international climate policy.

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