Matching mechanism in global public goods games:a case of climate protection

In the setting of dealing with climate change, this article designs a matching mechanism for global public goods provision with the aggregative game approach. Given endowment and the technology of each country, we propose the conditions under which the matching mechanism is able to guarantee full participation and Pareto efficient provision, respectively, in the cases with certain and uncertain preference information. These conditions cannot only be adopted in international negotiation and cooperation, but also refines the theory of matching game. In comparative static analyses, we discover that: First, changes of initial stock of climate goods produce a wealth effect and the crowd-out effect is less than 1. Second, climate tax policies affect the supply and welfare of each country only when they produce wealth effects, and if tax revenue is transferred into climate goods with more advanced technology, they will produce positive wealth effects. Third, modifying matching plans dynamically and appropriately can urge countries to improve technology, and especially given a Pareto optimal mechanism, adjusting the matching plan to keep marginal rates of transformation unchanged as technology changes is still able to ensure full participation and efficient supply of climate goods.

The Theoretical Innovation and Exemplary Value of the Belt and Road Initiative

As a global public good, the Belt and Road Initiative proposed by the Chinese government features being "non-rivalrous" and "non-excludable," which are two essential characteristics of public goods. From design philosophy to operational framework, from vision to action, distinct Chinese characteristics, style and temperament are fully demonstrated by this initiative. In theory, the Belt and Road Initiative promotes multiple innovations in global governance and enriches and develops international cooperation and the global value chain. The "Silk Road spirit" inherits and innovates the core philosophy of China's diplomacy since 1949; more importantly, its principle of achieving shared growth through discussion and collaboration is a key contribution to global governance theory. In practice, the Belt and Road Initiative highlights both regional cooperation and international agreement, and initiates a new model for China's diplomatic practice and international cooperation. Therefore, it is of exemplary value in terms of development, peace, culture and cooperation, while offering a new solution to dealing with international relations in the era of Reform and Opening-up. The past three years has generated marked achievements. The Belt and Road construction is at a critical stage of transition from quantitative change to qualitative change, from small achievements to significant success. In the future, China should take the initiative to promote the construction of two principal axes, further integrate with the philosophy underpinning China's diplomacy as a major country, innovate the theoretical system of the Belt and Road Initiative and forge a corresponding security system. As the old Chinese saying goes, "Big countries should treat small countries with kindness and justice, while small countries should treat big countries with wisdom." China should properly address the competition and cooperation with countries along the Belt and Road and further advance institutional construction within the framework of its major country diplomacy.

Designing Trade Rules to Promote Climate Sustainability

Climate sustainability has become a key issue of our time. Measures protecting the environment, however, can have an impact on the competitiveness of domestic firms and on cross-border trade. Therefore, regulatory bodies should enlarge the scope of their policies and treat climate sustainability as global public good; based on such concept trade rules are to be designed in a way that allows a fair balancing between the diverse interests.