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This paper studies how global warming, a worldwide \textit{public bad} should be regulated, whether such a regulation can be centralized and how to do so. We impose several key constraints on the design of such a regulatory policy: heterogeneity of countries, two-tier private information both at a national and international level and full participation. We show that there is a trade-off between a better internalization of the externality under a centralized regulation, although informatively contracted at the national and international level, and a lesser internalization under a decentralized domestic regulations with a lesser informational problem. The centralized policy dominates decentralized policies, but the existence of double level of asymmetry of information may rule out the possibility of implementing the optimal regulation. When optimal regulation is not possible, second-best centralized regulations must take into account the double level of asymmetry of information.
