A possible integration of multiple paradigms used in integrated assessment modelling of climate change
Most of the models used to analyze international climate policy treat the problem as if it operates on only a single level. This is the result of a reliance on integrated assessment models (IAMs) that, for reasons of analytical tractability, typically employ assumptions that allow the economy to be modeled as if it is managed by a single, utility-maximizing central planner without regard to the influence of either lower-level actors or international pressures. While game theoretic models have been used to study international negotiations, they generally do not consider feedback from domestic actors who have heterogeneous beliefs and vulnerability to climate change. In this paper, we provide an overview of a preliminary policy modeling framework, called ENGAGE, styled after the Putnam two-level game in which interactions among negotiators at the international level are linked with the preferences of constituents at the domestic level. Domestic constituents in our model include firms and households who function as agents within an evolutionary representation of economic growth, energy technology, and climate change, resulting in a two-way dynamic feedback between international agreements and domestic policy outcomes. We present the basic elements of the two levels of the model and discuss plans for future model development.
