Akademik Veri Yönetim Sistemi
Energy Policy, cilt.215, 2026 (SCI-Expanded, SSCI, Scopus)
At COP28 in November 2023, governments agreed to establish a Loss and Damage Fund to support developing countries in coping with the effects of climate change. We use a sequential Nash equilibrium game to study the incentives of countries that impose climate-related damages on other countries to compensate receivers of the negative externalities. We assume the latter play strategically, and they can make a cartel to punish generators of climate-related damages for insufficient or not compensation. We show that there exists a subgame perfect equilibrium in which generators partially compensate for the damages and receivers do not punish them. Hence, based on cumulative emissions and damage data from 1900 to 2023, we determine how much each country should contribute to or receive from the Loss and Damage Fund, and we assess the extent to which each country's contribution to the Fund reflects the internalization of the externalities it creates. Consistent with the model's predictions, we find that the Fund's design provides little incentive for major generators to internalize these externalities. Therefore, we conclude with policy recommendations to enhance the Fund's effectiveness in both compensating the affected countries and in reducing global GHG emissions.