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At the same time, it benefits from the reductions in emissions by other countries without incurring their costs. It has an incentive to free ride and leave other countries to incur the costs of changing to greener energies. If every country adapts a similar approach, and does nothing about pollution and climate change, then everyone will be economically disadvantaged in the long run...
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If every country adapts a similar approach, and does nothing about pollution and climate change, then everyone will be economically disadvantaged in the long run. Hence there is a need for some coordination of national policies across the globe to achieve a cooperative and higher global welfare outcome...
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