Designing a Bretton Woods Institution to Address Global Climate Change

Mitigating climate change risks will require some form of global effort to limit emissions, adapt to a changing climate, and geo-engineer the global climate system. These three policy approaches – prevention, adaptation and remediation – involve, to varying degrees, little incentive to account for the external impacts of decision-making by individuals, firms and nation-states. Thus a ‘successful’ international climate policy architecture, at a minimum, will need to promote collaboration among nation-states that results in sovereign policies and actions to reduce climate change risks by modifying individuals’ and firms’ incentives. Successful collaboration requires more than a simple, initial agreement. The dynamics of learning about climate change and learning about the effectiveness of various risk mitigation measures will necessitate a number of rounds of collaboration among nations. Given the strong incentives for free-riding, what are the characteristics of an international climate policy architecture that could enable repeated collaboration in climate change risk reduction efforts?