Global warming and international cooperation : would negotiation of international environmental treaties be easier if the world only consisted of China, USA and EU?

Abstract

The purpose of this master thesis is to use game theory to analyse global warming in a world consisting of three countries. The three countries are China, USA and EU, who currently accounts for more than 50% of carbon emissions. The first part models the countries’ payoffs according to different levels of participation and abatement. The second part analyses the results and combines this with game theory under different scenarios. After discussing the Nash equilibrium and the efficient solution, both in a cooperative and a noncooperative environment, I move on to see how these results fit with what we observe in the real world.