ABSTRACT
This chapter explores the connection between energy and environment by means of the energy-environment conundrum. The consumption of energy is at the core of economic development as well as at the environmental predicament that is climate change. There is strong agreement among natural scientists that the carbon equivalent emissions lead to global warming and climate change, although a small minority still raises doubts. In global environmental policymaking, it is important to overcome collective action difficulties such as free riding, transactions costs, and the so-called tragedy of the commons. The energy-environment problem presents the governments of the world with a gigantic Prisoner's dilemma (PD) game, wherein coordination is most difficult to accomplish due to myopia and opportunism. A global ecology policy aimed at reducing the emissions of greenhouse gases must target total country emissions.
