Browsing by Author "Edenhofer, Ottmar"
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- ItemAlternative carbon price trajectories can avoid excessive carbon removal([London] : Nature Publishing Group UK, 2021) Strefler, Jessica; Kriegler, Elmar; Bauer, Nico; Luderer, Gunnar; Pietzcker, Robert C.; Giannousakis, Anastasis; Edenhofer, OttmarThe large majority of climate change mitigation scenarios that hold warming below 2 °C show high deployment of carbon dioxide removal (CDR), resulting in a peak-and-decline behavior in global temperature. This is driven by the assumption of an exponentially increasing carbon price trajectory which is perceived to be economically optimal for meeting a carbon budget. However, this optimality relies on the assumption that a finite carbon budget associated with a temperature target is filled up steadily over time. The availability of net carbon removals invalidates this assumption and therefore a different carbon price trajectory should be chosen. We show how the optimal carbon price path for remaining well below 2 °C limits CDR demand and analyze requirements for constructing alternatives, which may be easier to implement in reality. We show that warming can be held at well below 2 °C at much lower long-term economic effort and lower CDR deployment and therefore lower risks if carbon prices are high enough in the beginning to ensure target compliance, but increase at a lower rate after carbon neutrality has been reached.
- ItemAssessing human and environmental pressures of global land-use change 2000-2010(Cambridge : Cambridge Univ. Press, 2019) Creutzig, Felix; Bren d'Amour, Christopher; Weddige, Ulf; Fuss, Sabine; Beringer, Tim; Gläser, Anne; Kalkuhl, Matthias; Steckel, Jan Christoph; Radebach, Alexander; Edenhofer, OttmarGlobal land is turning into an increasingly scarce resource. We here present a comprehensive assessment of co-occuring land-use change from 2000 until 2010, compiling existing spatially explicit data sources for different land uses, and building on a rich literature addressing specific land-use changes in all world regions. This review systematically categorizes patterns of land use, including regional urbanization and agricultural expansion but also globally telecoupled land-use change for all world regions. Managing land-use change patterns across the globe requires global governance. Here we present a comprehensive assessment of the extent and density of multiple drivers and impacts of land-use change. We combine and reanalyze spatially explicit data of global land-use change between 2000 and 2010 for population, livestock, cropland, terrestrial carbon and biodiversity. We find pervasive pressure on biodiversity but varying patterns of gross land-use changes across world regions. Our findings enable a classification of land-use patterns into three types. The 'consumers' type, displayed in Europe and North America, features high land footprints, reduced direct human pressures due to intensification of agriculture, and increased reliance on imports, enabling a partial recovery of terrestrial carbon and reducing pressure on biodiversity. In the 'producer' type, most clearly epitomized by Latin America, telecoupled land-use links drive biodiversity and carbon loss. In the 'mover' type, we find strong direct domestic pressures, but with a wide variety of outcomes, ranging from a concurrent expansion of population, livestock and croplands in Sub-Saharan Africa at the cost of natural habitats to strong pressure on cropland by urbanization in Eastern Asia. In addition, anthropogenic climate change has already left a distinct footprint on global land-use change. Our data- and literature-based assessment reveals region-specific opportunities for managing global land-use change. © 2019 The Author(s).
- ItemBetween Scylla and Charybdis: Delayed mitigation narrows the passage between large-scale CDR and high costs(Bristol : IOP Publishing, 2018) Strefler, Jessica; Bauer, Nico; Kriegler, Elmar; Popp, Alexander; Giannousakis, Anastasis; Edenhofer, OttmarThere are major concerns about the sustainability of large-scale deployment of carbon dioxide removal (CDR) technologies. It is therefore an urgent question to what extent CDR will be needed to implement the long term ambition of the Paris Agreement. Here we show that ambitious near term mitigation significantly decreases CDR requirements to keep the Paris climate targets within reach. Following the nationally determined contributions (NDCs) until 2030 makes 2 °C unachievable without CDR. Reducing 2030 emissions by 20% below NDC levels alleviates the trade-off between high transitional challenges and high CDR deployment. Nevertheless, transitional challenges increase significantly if CDR is constrained to less than 5 Gt CO2 a−1 in any year. At least 8 Gt CO2 a−1 CDR are necessary in the long term to achieve 1.5 °C and more than 15 Gt CO2 a−1 to keep transitional challenges in bounds.
- ItemCCS-Bonds as a superior instrument to incentivize secure carbon sequestration(Amsterdam : Elsevier, 2009) Held, Hermann; Edenhofer, OttmarGeological sequestration of CO2 on a massive scale implies that large area fractions of the underground could become flooded by CO2, imposing a unprecedented regulatory challenge to environmental authorities. Therefore we propose carbon sequestration bonds as complementary, market-based instruments that should further help to manage the risk of decadal-scale CO2 leakage. Such bond schemes address market failures that could occur if the investment behavior of operators under uncertainty differed from society’s preference. For a stylized setup we demonstrate that our bond system has the potential to simultaneously address regulatory challenges stemming from information asymmetries and diverging orders of preference.
- ItemEconomic mitigation challenges: How further delay closes the door for achieving climate targets(Bristol : IOP Publishing, 2013) Luderer, Gunnar; Pietzcker, Robert C.; Bertram, Christoph; Kriegler, Elmar; Meinshausen, Malte; Edenhofer, OttmarWhile the international community aims to limit global warming to below 2 ° C to prevent dangerous climate change, little progress has been made towards a global climate agreement to implement the emissions reductions required to reach this target. We use an integrated energy–economy–climate modeling system to examine how a further delay of cooperative action and technology availability affect climate mitigation challenges. With comprehensive emissions reductions starting after 2015 and full technology availability we estimate that maximum 21st century warming may still be limited below 2 ° C with a likely probability and at moderate economic impacts. Achievable temperature targets rise by up to ~0.4 ° C if the implementation of comprehensive climate policies is delayed by another 15 years, chiefly because of transitional economic impacts. If carbon capture and storage (CCS) is unavailable, the lower limit of achievable targets rises by up to ~0.3 ° C. Our results show that progress in international climate negotiations within this decade is imperative to keep the 2 ° C target within reach.
- ItemEntdecken: Entwicklung und Dekarbonisierung in Entwicklungs- und Schwellenländern : Schlussbericht ; Laufzeit des Vorhabens: 01.08.2010 - 31.10.2013(Hannover : Technische Informationsbibliothek, 2013) Edenhofer, Ottmar[no abstract available]
- ItemFossil-fueled development (SSP5): An energy and resource intensive scenario for the 21st century(Amsterdam : Elsevier, 2016) Kriegler, Elmar; Bauer, Nico; Popp, Alexander; Humpenöder, Florian; Leimbach, Marian; Strefler, Jessica; Baumstark, Lavinia; Bodirsky, Benjamin Leon; Hilaire, Jérôme; Klein, David; Mouratiadou, Ioanna; Weindl, Isabelle; Bertram, Christoph; Dietrich, Jan-Philipp; Luderer, Gunnar; Pehl, Michaja; Pietzcker, Robert; Piontek, Franziska; Lotze-Campen, Hermann; Biewald, Anne; Bonsch, Markus; Giannousakis, Anastasis; Kreidenweis, Ulrich; Müller, Christoph; Rolinski, Susanne; Schultes, Anselm; Schwanitz, Jana; Stevanovic, Miodrag; Calvin, Katherine; Emmerling, Johannes; Fujimori, Shinichiro; Edenhofer, OttmarThis paper presents a set of energy and resource intensive scenarios based on the concept of Shared Socio-Economic Pathways (SSPs). The scenario family is characterized by rapid and fossil-fueled development with high socio-economic challenges to mitigation and low socio-economic challenges to adaptation (SSP5). A special focus is placed on the SSP5 marker scenario developed by the REMIND-MAgPIE integrated assessment modeling framework. The SSP5 baseline scenarios exhibit very high levels of fossil fuel use, up to a doubling of global food demand, and up to a tripling of energy demand and greenhouse gas emissions over the course of the century, marking the upper end of the scenario literature in several dimensions. These scenarios are currently the only SSP scenarios that result in a radiative forcing pathway as high as the highest Representative Concentration Pathway (RCP8.5). This paper further investigates the direct impact of mitigation policies on the SSP5 energy, land and emissions dynamics confirming high socio-economic challenges to mitigation in SSP5. Nonetheless, mitigation policies reaching climate forcing levels as low as in the lowest Representative Concentration Pathway (RCP2.6) are accessible in SSP5. The SSP5 scenarios presented in this paper aim to provide useful reference points for future climate change, climate impact, adaption and mitigation analysis, and broader questions of sustainable development.
- ItemIntroduction to the AMPERE model intercomparison studies on the economics of climate stabilization(Amsterdam [u.a.] : Elsevier Science, 2014) Kriegler, Elmar; Riahi, Keywan; Bosetti, Valentina; Capros, Pantelis; Petermann, Nils; van Vuuren, Detlef P.; Weyant, John P.; Edenhofer, Ottmar[No abstract available]
- ItemThe IPCC AR5 guidance note on consistent treatment of uncertainties: A common approach across the working groups(Heidelberg : Springer, 2011) Mastrandrea, Michael D.; Mach, Katharine J.; Plattner, Gian-Kasper; Edenhofer, Ottmar; Stocker, Thomas F.; Field, Christopher B.; Ebi, Kristie L.; Matschoss, Patrick R.Evaluation and communication of the relative degree of certainty in assessment findings are key cross-cutting issues for the three Working Groups of the Intergovernmental Panel on Climate Change. A goal for the Fifth Assessment Report, which is currently under development, is the application of a common framework with associated calibrated uncertainty language that can be used to characterize findings of the assessment process. A guidance note for authors of the Fifth Assessment Report has been developed that describes this common approach and language, building upon the guidance employed in past Assessment Reports. Here, we introduce the main features of this guidance note, with a focus on how it has been designed for use by author teams. We also provide perspectives on considerations and challenges relevant to the application of this guidance in the contribution of each Working Group to the Fifth Assessment Report. Despite the wide spectrum of disciplines encompassed by the three Working Groups, we expect that the framework of the new uncertainties guidance will enable consistent communication of the degree of certainty in their policy-relevant assessment findings.
- ItemIs atmospheric carbon dioxide removal a game changer for climate change mitigation?(Heidelberg : Springer, 2013) Kriegler, Elmar; Edenhofer, Ottmar; Reuster, Lena; Luderer, Gunnar; Klein, DavidThe ability to directly remove carbon dioxide from the atmosphere allows the decoupling of emissions and emissions control in space and time. We ask the question whether this unique feature of carbon dioxide removal technologies fundamentally alters the dynamics of climate mitigation pathways. The analysis is performed in the coupled energy-economy-climate model ReMIND using the bioenergy with CCS route as an application of CDR technology. BECCS is arguably the least cost CDR option if biomass availability is not a strongly limiting factor. We compare mitigation pathways with and without BECCS to explore the impact of CDR technologies on the mitigation portfolio. Effects are most pronounced for stringent climate policies where BECCS is a key technology for the effectiveness of carbon pricing policies. The decoupling of emissions and emissions control allows prolonging the use of fossil fuels in sectors that are difficult to decarbonize, particularly in the transport sector. It also balances the distribution of mitigation costs across future generations. CDR is not a silver bullet technology. The largest part of emissions reductions continues to be provided by direct mitigation measures at the emissions source. The value of CDR lies in its flexibility to alleviate the most costly constraints on mitigating emissions.
- ItemLocked into Copenhagen pledges - Implications of short-term emission targets for the cost and feasibility of long-term climate goals(Amsterdam [u.a.] : Elsevier Science, 2013) Riahi, Keywan; Kriegler, Elmar; Johnson, Nils; Bertram, Christoph; den Elzen, Michel; Eom, Jiyong; Schaeffer, Michiel; Edmonds, Jae; Isaac, Morna; Krey, Volker; Longden, Thomas; Luderer, Gunnar; Méjean, Aurélie; McCollum, David L.; Mima, Silvana; Turton, Hal; van Vuuren, Detlef P.; Wada, Kenichi; Bosetti, Valentina; Capros, Pantelis; Criqui, Patrick; Hamdi-Cherif, Meriem; Kainuma, Mikiko; Edenhofer, OttmarThis paper provides an overview of the AMPERE modeling comparison project with focus on the implications of near-term policies for the costs and attainability of long-term climate objectives. Nine modeling teams participated in the project to explore the consequences of global emissions following the proposed policy stringency of the national pledges from the Copenhagen Accord and Cancún Agreements to 2030. Specific features compared to earlier assessments are the explicit consideration of near-term 2030 emission targets as well as the systematic sensitivity analysis for the availability and potential of mitigation technologies. Our estimates show that a 2030 mitigation effort comparable to the pledges would result in a further “lock-in” of the energy system into fossil fuels and thus impede the required energy transformation to reach low greenhouse-gas stabilization levels (450 ppm CO2e). Major implications include significant increases in mitigation costs, increased risk that low stabilization targets become unattainable, and reduced chances of staying below the proposed temperature change target of 2 °C in case of overshoot. With respect to technologies, we find that following the pledge pathways to 2030 would narrow policy choices, and increases the risks that some currently optional technologies, such as carbon capture and storage (CCS) or the large-scale deployment of bioenergy, will become “a must” by 2030.
- ItemMaking or breaking climate targets: The AMPERE study on staged accession scenarios for climate policy(Amsterdam [u.a.] : Elsevier Science, 2014) Kriegler, Elmar; Riahi, Keywan; Bauer, Nico; Schwanitz, Valeria Jana; Petermann, Nils; Bosetti, Valentina; Marcucci, Adriana; Otto, Sander; Paroussos, Leonidas; Rao, Shilpa; Currás, Tabaré Arroyo; Ashina, Shuichi; Bollen, Johannes; Eom, Jiyong; Hamdi-Cherif, Meriem; Longden, Thomas; Kitous, Alban; Méjean, Aurélie; Sano, Fuminori; Schaeffer, Michiel; Wada, Kenichi; Capros, Pantelis; van Vuuren, Detlef P.; Edenhofer, OttmarThis study explores a situation of staged accession to a global climate policy regime from the current situation of regionally fragmented and moderate climate action. The analysis is based on scenarios in which a front runner coalition – the EU or the EU and China – embarks on immediate ambitious climate action while the rest of the world makes a transition to a global climate regime between 2030 and 2050. We assume that the ensuing regime involves strong mitigation efforts but does not require late joiners to compensate for their initially higher emissions. Thus, climate targets are relaxed, and although staged accession can achieve significant reductions of global warming, the resulting climate outcome is unlikely to be consistent with the goal of limiting global warming to 2 degrees. The addition of China to the front runner coalition can reduce pre-2050 excess emissions by 20–30%, increasing the likelihood of staying below 2 degrees. Not accounting for potential co-benefits, the cost of front runner action is found to be lower for the EU than for China. Regions that delay their accession to the climate regime face a trade-off between reduced short term costs and higher transitional requirements due to larger carbon lock-ins and more rapidly increasing carbon prices during the accession period.
- ItemOptimal carbon taxation and horizontal equity: A welfare-theoretic approach with application to German household data(Amsterdam : Elsevier, 2022) Hänsel, Martin C.; Franks, Max; Kalkuhl, Matthias; Edenhofer, OttmarWe develop a model of optimal taxation and redistribution under an ambitious climate target. We take into account vertical income differences, but also explicitly capture horizontal equity concerns by considering heterogeneous energy efficiencies. By deriving first- and second-best rules for policy instruments including carbon and labor taxes, transfers and energy subsidies, we investigate analytically how vertical and horizontal inequality is considered in the welfare maximizing tax structure. We calibrate the model to German household data and a 30 percent emission reduction goal and show that redistribution of carbon tax revenues via household-specific transfers is the first-best policy. Under plausible assumptions on inequality aversion, transfers to energy-intensive households should be about five times higher than transfers to energy-efficient households. Equal per-capita transfers do not require to observe households’ efficiency type, but increase equity-weighted mitigation costs by around 5 percent compared to the first-best. Mitigation costs increase by less, if the government can implement a uniform clean energy subsidy or household-specific tax-subsidy schemes on energy consumption and labor income that target heterogeneous energy efficiencies. Horizontal equity concerns may therefore constitute a new second-best rationale for clean energy policies or differentiated energy taxes.
- ItemPigou in the 21st Century: a tribute on the occasion of the 100th anniversary of the publication of The Economics of Welfare(New York, NY : Springer Science + Business Media B.V., 2021) Edenhofer, Ottmar; Franks, Max; Kalkuhl, MatthiasThe year 2020 marks the centennial of the publication of Arthur Cecil Pigou’s magnum opus The Economics of Welfare. Pigou’s pricing principles have had an enduring influence on the academic debate, with a widespread consensus having emerged among economists that Pigouvian taxes or subsidies are theoretically desirable, but politically infeasible. In this article, we revisit Pigou’s contribution and argue that this consensus is somewhat spurious, particularly in two ways: (1) Economists are too quick to ignore the theoretical problems and subtleties that Pigouvian pricing still faces; (2) The wholesale skepticism concerning the political viability of Pigouvian pricing is at odds with its recent practical achievements. These two points are made by, first, outlining the theoretical and political challenges that include uncertainty about the social cost of carbon, the unclear relationship between the cost–benefit and cost-effectiveness approaches, distributional concerns, fragmented ministerial responsibilities, an unstable tax base, commitment problems, lack of acceptance and trust between government and citizens as well as incomplete international cooperation. Secondly, we discuss the recent political success of Pigouvian pricing, as evidenced by the German government’s 2019 climate policy reform and the EU’s Green Deal. We conclude by presenting a research agenda for addressing the remaining barriers that need to be overcome to make Pigouvian pricing a common political practice.
- ItemReports of coal's terminal decline may be exaggerated(Bristol : IOP Publishing, 2018) Edenhofer, Ottmar; Steckel, Jan Christoph; Jakob, Michael; Bertram, ChristophWe estimate the cumulative future emissions expected to be released by coal power plants that are currently under construction, announced, or planned. Even though coal consumption has recently declined and plans to build new coal-fired capacities have been shelved, constructing all these planned coal-fired power plants would endanger national and international climate targets. Plans to build new coal-fired power capacity would likely undermine the credibility of some countries' (Intended) Nationally Determined Contributions submitted to the UNFCCC. If all the coal-fired power plants that are currently planned were built, the carbon budget for reaching the 2 °C temperature target would nearly be depleted. Propositions about 'coal's terminal decline' may thereby be premature. The phase-out of coal requires dedicated and well-designed policies. We discuss the political economy of policy options that could avoid a continued build-up of coal-fired power plants.
- ItemReviewing the Market Stability Reserve in light of more ambitious EU ETS emission targets(Amsterdam [u.a.] : Elsevier Science, 2021) Osorio, Sebastian; Tietjen, Oliver; Pahle, Michael; Pietzcker, Robert C.; Edenhofer, OttmarThe stringency of the EU's Emission Trading System (ETS) is bound to be ratcheted-up to deliver on more ambitious goals as formulated in the EU's Green Deal. Tightening the cap needs to consider the interactions with the Market Stability Reserve (MSR), which will be reviewed in 2021. We analyse these issues using the model LIMES-EU. First, we examine how revising MSR parameters impacts allowance cancellations. We find that varying key design parameters leads to cancellations in the range of 2.6–7.9 Gt – compared to 5.1 Gt under current regulation. Overall, the bank thresholds, which define when there is intake to/outtake from the MSR, have the highest impact. Intake rates above 12% only have a limited effect, and cause oscillatory intake behaviour. Second, we analyse how more ambitious climate 2030 targets can be achieved by adjusting the linear reduction factor (LRF). We find that the LRF increases MSR cancellations substantially up to 10.0 Gt. This implies that increasing its value from currently 2.2% to only 2.6% could be consistent with an EU-wide target of −55% by 2030. However, MSR cancellations are subject to large uncertainty, which increases the complexity of the market and induces high price uncertainty.
- ItemScientific assessments to facilitate deliberative policy learning(Basingstoke, Hampshire : Palgrave Macmillan, 2016) Kowarsch, Martin; Garard, Jennifer; Riousset, Pauline; Lenzi, Dominic; Dorsch, Marcel J.; Knopf, Brigitte; Harrs, Jan-Albrecht; Edenhofer, OttmarPutting the recently adopted global Sustainable Development Goals or the Paris Agreement on international climate policy into action will require careful policy choices. Appropriately informing decision-makers about longer-term, wicked policy issues remains a considerable challenge for the scientific community. Typically, these vital policy issues are highly uncertain, value-laden and disputed, and affect multiple temporal and spatial scales, governance levels, policy fields, and socioeconomic contexts simultaneously. In light of this, science-policy interfaces should help facilitate learning processes and open deliberation among all actors involved about potentially acceptable policy pathways. For this purpose, science-policy interfaces must strive to foster some enabling conditions: (1) “representation” in terms of engaging with diverse stakeholders (including experts) and acknowledging divergent viewpoints; (2) “empowerment” of underrepresented societal groups by co-developing and integrating policy scenarios that reflect their specific knowledge systems and worldviews; (3) “capacity building” regarding methods and skills for integration and synthesis, as well as through the provision of knowledge synthesis about the policy solution space; and (4) “spaces for deliberation”, facilitating direct interaction between different stakeholders, including governments and scientists. We argue that integrated, multi-stakeholder, scientific assessment processes—particularly the collaborative assessments of policy alternatives and their various implications—offer potential advantages in this regard, compared with alternatives for bridging scientific expertise and public policy. This article is part of a collection on scientific advice to governments.
- ItemShort term policies to keep the door open for Paris climate goals(Bristol : IOP Publ., 2018) Kriegler, Elmar; Bertram, Christoph; Kuramochi, Takeshi; Jakob, Michael; Pehl, Michaja; Stevanović, Miodrag; Höhne, Niklas; Luderer, Gunnar; Minx, Jan C; Fekete, Hanna; Hilaire, Jérôme; Luna, Lisa; Popp, Alexander; Steckel, Jan Christoph; Sterl, Sebastian; Yalew, Amsalu Woldie; Dietrich, Jan Philipp; Edenhofer, OttmarClimate policy needs to account for political and social acceptance. Current national climate policy plans proposed under the Paris Agreement lead to higher emissions until 2030 than cost-effective pathways towards the Agreements' long-term temperature goals would imply. Therefore, the current plans would require highly disruptive changes, prohibitive transition speeds, and large long-term deployment of risky mitigation measures for achieving the agreement's temperature goals after 2030. Since the prospects of introducing the cost-effective policy instrument, a global comprehensive carbon price in the near-term, are negligible, we study how a strengthening of existing plans by a global roll-out of regional policies can ease the implementation challenge of reaching the Paris temperature goals. The regional policies comprise a bundle of regulatory policies in energy supply, transport, buildings, industry, and land use and moderate, regionally differentiated carbon pricing. We find that a global roll-out of these policies could reduce global CO2 emissions by an additional 10 GtCO2eq in 2030 compared to current plans. It would lead to emissions pathways close to the levels of cost-effective likely below 2 °C scenarios until 2030, thereby reducing implementation challenges post 2030. Even though a gradual phase-in of a portfolio of regulatory policies might be less disruptive than immediate cost-effective carbon pricing, it would perform worse in other dimensions. In particular, it leads to higher economic impacts that could become major obstacles in the long-term. Hence, such policy packages should not be viewed as alternatives to carbon pricing, but rather as complements that provide entry points to achieve the Paris climate goals.
- ItemThe social cost of carbon and inequality: When local redistribution shapes global carbon prices(Amsterdam [u.a.] : Elsevier, 2021) Kornek, Ulrike; Klenert, David; Edenhofer, Ottmar; Fleurbaey, MarcThe social cost of carbon is a central metric for optimal carbon prices. Previous literature shows that inequality significantly influences the social cost of carbon, but mostly omits heterogeneity below the national level. We present an optimal taxation model of the social cost of carbon that accounts for inequality between and within countries. We find that climate and distributional policy can generally not be separated. If only one country does not compensate low-income households for disproportionate damages, the social cost of carbon tends to increase globally. Optimal carbon prices remain roughly unchanged if national redistribution leaves inequality between households unaffected by climate change and if the utility of households is approximately logarithmic in consumption.
- ItemThe strategic dimension of financing global public goods(Amsterdam : Elsevier, 2020) Kornek, Ulrike; Edenhofer, OttmarOne challenge in addressing transboundary problems such as climate change is the incentive to free-ride. Transfers from multilateral compensation funds are often used to counteract such incentives, albeit with varying success. We examine how such funds can change the incentive to free-ride in a global public-goods game. In our game, self-interested countries choose their own preferred course, deciding their voluntary public good provision, whether to join a fund that offers compensation for providing the public good and the volume of compensatory payments. We show that (i) total public-good provision is higher when those contributing are given more compensation; and (ii) non-participation in the fund can be punished if the remaining members decrease their public-good provision sufficiently. We then examine three specific fund designs. In the first, the compensation paid to each country is equal to the percentage of above-average total costs for public-goods provision. This design is best able to deter free-riding and can establish the social optimum as the equilibrium. In the second, the compensation paid to each country is a function of the marginal cost of their public-good provision. Here there are significant incentives to free-ride. In the third case, the monetary resources provided by the fund are fixed, a design frequently encountered in international funds. This design is the one least able to deter free-riding. © 2020 The Author(s)