CBA and climate change. Assume a world composed of 10 identical countries. Each country contemplates the possibility to reduce its CO2 emissions by 1 million tons. Due to the public good nature of the action, costs are domestic but benefits are global, and equally shared among countries. After careful calculations, it turns out that, for each million ton reduction of CO2, the present value of total costs are 4 million USD for the country realizing the reduction effort, while the present value of total benefits are 20 million USD for the world (i.e. 2 million USD per country as they are identical). Is it socially worthwhile to reduce emissions by 1 million ton for the concerned country? And for the world? Imagine each country acts non cooperatively in a simultaneous game where the strategy is either to contribute (i.e. reduce emissions by 1 million ton) or not to contribute to global emission reduction. What is the Nash equilibrium? What is the implied social loss with respect to the social optimum? Which country in the world has been caught in such a Prisoner's dilemma?