Why Climate Agreements Fail: An Innovative Solution Based on Mechanism Design | with Klaus M. Schmidt

In this episode together with our guest Klaus M. Schmidt, we explore the economic challenges behind global climate agreements. We discuss why past agreements like the Kyoto Protocol and the Paris Agreement struggled to deliver the desired results and examine how a new negotiation design centered on a uniform CO₂ price could lead to better outcomes. Klaus also shares insights from experimental studies testing this approach in practice.

Klaus M. Schmidt is an economics professor at Ludwig Maximilian University of Munich, and an expert in social preferences and contract theory, among others.