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Stable International Environmental Agreements: An Analytical Approach

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  • EFFROSYNI DIAMANTOUDI
  • EFTICHIOS S. SARTZETAKIS

Abstract

In this paper we examine the formation of international environmental agreements (IEAs). We show that the welfare of the signatories does not increase monotonically with respect to the number of signatories. We provide an analytical solution of the leadership model. In particular, we find that if the number of countries is greater than four then there exists a unique stable IEA with either two, three, or four signatories. Furthermore, we show that the welfare of the signatories is almost at its lowest level when the IEA is stable. While in our model each country's choice variable is emissions, we extend our results to the case where the choice variable is abatement efforts.

Suggested Citation

  • Effrosyni Diamantoudi & Eftichios S. Sartzetakis, 2006. "Stable International Environmental Agreements: An Analytical Approach," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(2), pages 247-263, May.
    • Handle: RePEc:bla:jpbect:v:8:y:2006:i:2:p:247-263
    DOI: 10.1111/j.1467-9779.2006.00262.x
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    More about this item

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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