Can altruism stabilise international climate agreements?
AbstractWe study the impact of altruism on the stability of international climate agreements. We consider the standard two-stage game for the analysis of international environmental agreements where countries announce their participation at the first stage and abatement levels are chosen at the second stage. We modify the game to consider altruism in the participation decision, i.e. countries consider, to a certain extent, the net benefits for other countries in their decisions. We study two types of altruism: impartial altruism, where countries show a concern for all other countries, and community altruism, where the concern extends only to coalition partners. We use the stability of coalitions model (STACO) to illustrate the impacts of both types of altruism on the stability of a climate agreement. We find that a limited degree of altruism is sufficient to stabilise the Grand Coalition such that a globally efficient climate policy can emerge while in the absence of altruism only a fraction of countries would join a climate agreement and the benefits of cooperation would largely remain unexploited. Our results indicate how moving beyond national interests can support the success of international climate agreements.
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Bibliographic InfoArticle provided by Elsevier in its journal Ecological Economics.
Volume (Year): 81 (2012)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/ecolecon
Stability of international climate agreements; STACO model; Altruism;
Find related papers by JEL classification:
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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- Thomas Eichner & Rüdiger Pethig, 2012.
"Stable Climate Coalitions (Nash) and International Trade,"
CESifo Working Paper Series
3915, CESifo Group Munich.
- Thomas Eichner & Rüdiger Pethig, 2012. "Stable climate coalitions (Nash) and international trade," Volkswirtschaftliche DiskussionsbeitrÃ¤ge 155-12, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
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