Fig. 9

Elasticity of substitution. The reduction of one unit of CO₂ causes a reduction of the utility level of country B by about 0.7096 in 2035. The elasticity of substitution increased annually by about 0.05% and over the analyzed time by about 0.69%. A growing utility gap can influence the political systems, if the consumers of country B perceive the utility decline as a welfare loss. First, it is well known that people compare themselves to others of the peer group [67]. Thus, the consumer of the developed country B might perceive the gap of international development negatively. Second, the perception might be even more negative, as the loss, which consumer of Country B faces, is more important than a gain with changes always being related to reference points according to the prospect theory by Kahneman and Tversky [68]