Learning and international environmental agreements.

In this paper we synthesise and extend our earlier analysis (Ulph, J Risk Uncertain 29(1):53–73, 2004; Kolstad, J Environ Econ Manage 53(1):68–79, 2007) of the formation of an International Environmental Agreement (IEA) under uncertainty about the damages that might be caused by climate change and different models of learning, in which better information about these damage costs become available. Our results are generally pessimistic: the possibility of either complete or partial learning generally reduces the level of global welfare that can be achieved from forming an IEA. This suggests that information can have negative value. This may seem strange, since for a single decision-maker information cannot have negative value, because it can always be ignored. However in this case there are strategic interactions between a number of decision-makers responding to information, and it is these strategic interactions which can give information a negative value. [ABSTRACT FROM AUTHOR]