We study public good provision in a two-country dynamic setup with
environmental externalities. In this framework, we examine robust decision
making under potential misspecification of the process that describes the
evolution of the environmental public good. Robust policies, arising from fear
of model misspecification, help to correct for the inefficiencies associated with
free riding and thus increase the provision of the public good. As a result,
there can be welfare gains from robust policies even when the fear of model
misspecification proves to be unfounded
