Abstract

International cooperation is needed to substantially reduce global greenhouse gas emissions and avoid dangerous climate change. The possibility of cooperation is influenced by the presence of uncertainty in both damages from climate change and the development of low-carbon technologies. This paper integrates uncertainty into an analysis of the stability of global climate cooperation, using cooperative game theory. I find that the deterministic result does not necessarily carry over to the case including uncertainty, and that the stability of global cooperation crucially depends on the ability of a coalition to redistribute risk between members with different levels of risk aversion. The results suggest that risk redistribution should feature prominently in the international climate regime.