Today, the international community faces many challenges that relate to the outcomes, regulation and understanding of collective action. If the outcome of collective action is negatively impacting collective welfare, it is possible to identify a collective action problem. As a result, solving collective action problems can be regarded as a key economic determinant.The most prominently featured
... [Show full abstract] collective action problem can be identified in the effects of climate change. The term climate change describes the man-made effect of global warming mostly generated by the aggregated amount of every nations emission of greenhouse gases. The atmosphere in which greenhouse gases are emitted in is equally shared by all nations and emissions travel without borders, meaning that individual actions have the capability to impact other or even all individual entities of the collective, leading up to decreased collective welfare on a global scale. In the case of climate change, these negative effects on collective welfare are significant.