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Can international environmental cooperation be bought?

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  • Fuentes-Albero, Cristina
  • Rubio, Santiago J.

Abstract

In this paper a two-stage game of international environmental agreement formation with asymmetric countries is analytically solved. The equilibrium of the game makes it possible to determine the size and composition of a stable agreement. Two cases are studied. In the first case, countries differ only in abatement costs, while in the second case, they differ in environmental damages. In both cases, two different institutional settings, one without transfers and another with transfers, are considered. The results establish that the asymmetry assumption has no important effects on the scope of cooperation in comparison with the symmetric case if transfers are not used or abatement costs represent the only difference among countries. However, when the only difference is in environmental damages, the level of cooperation that can be bought through a self-financed transfer scheme increases with the degree of asymmetry.

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Bibliographic Info

Article provided by Elsevier in its journal European Journal of Operational Research.

Volume (Year): 202 (2010)
Issue (Month): 1 (April)
Pages: 255-264

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Handle: RePEc:eee:ejores:v:202:y:2010:i:1:p:255-264

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Web page: http://www.elsevier.com/locate/eor

Related research

Keywords: C72 D62 F02 Q20 Self-enforcing international environmental agreements Linear environmental damages Emissions Transfers;

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Cited by:
  1. Michael Finus & Pedro Pintassilgo, 2010. "International Environmental Agreements under Uncertainty: Does the Veil of Uncertainty Help?," Discussion Papers 1003, Exeter University, Department of Economics.
  2. Thomas Eichner & Rüdiger Pethig, 2012. "Stable Climate Coalitions (Nash) and International Trade," CESifo Working Paper Series 3915, CESifo Group Munich.
  3. Eyckmans, Johan & Finus, Michael & Mallozziy, Lina, 2012. "A New Class of Welfare Maximizing Stable Sharing Rules for Partition Function Games with Externalities," Department of Economics Working Papers 32513, University of Bath, Department of Economics.
  4. Michael Finus & Pedro Pintassilgo & Marko Lindroos & Gordon Munro, 2008. "Stability and Success of Regional Fisheries Management Organizations," Working Papers 2008.20, Fondazione Eni Enrico Mattei.
  5. Gersbach, Hans & Winkler, Ralph, 2012. "Global refunding and climate change," Journal of Economic Dynamics and Control, Elsevier, vol. 36(11), pages 1775-1795.
  6. Ansink, Erik & Bouma, Jetske, 2013. "Effective support for community resource management," Forest Policy and Economics, Elsevier, vol. 37(C), pages 94-103.
  7. Wang, Yiming, 2013. "A time-consistent model for cooperation in international pollution control," Economic Modelling, Elsevier, vol. 33(C), pages 500-506.
  8. Jonathan Colmer, 2011. "Asymmetry, optimal transfers and international environmental agreements," Grantham Research Institute on Climate Change and the Environment Working Papers, Grantham Research Institute on Climate Change and the Environment 66, Grantham Research Institute on Climate Change and the Environment.
  9. Dellink, Rob & Finus, Michael, 2012. "Uncertainty and climate treaties: Does ignorance pay?," Resource and Energy Economics, Elsevier, vol. 34(4), pages 565-584.
  10. Pierre Courtois & Tarik Tazdaït, 2011. "Bargaining over a climate deal: is it worse to wait and see?," Working Papers, LAMETA, Universtiy of Montpellier 11-07, LAMETA, Universtiy of Montpellier, revised Mar 2011.
  11. Kai Lessmann & Ulrike Kornek & Valentina Bosetti & Rob Dellink & Johannes Emmerling & Johan Eyckmans & Miyuki Nagashima & Hans-Peter Weikard & Zili Yang, 2014. "The Stability and Effectiveness of Climate Coalitions: A Comparative Analysis of Multiple Integrated Assessment Models," Working Papers 2014.05, Fondazione Eni Enrico Mattei.
  12. De Zeeuw, A. & Ochea, M., 2013. "Evolution of Reciprocity in Asymmetric International Environmental Negotiations," CeNDEF Working Papers 13-09, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
  13. Beard, Rodney & Mallawaarachchi, Thilak, 2011. "Are international environmental agreements stable ex-post?," MPRA Paper 34303, University Library of Munich, Germany.
  14. Glanemann, Nicole, 2012. "Can international environmental cooperation be bought: Comment," European Journal of Operational Research, Elsevier, Elsevier, vol. 216(3), pages 697-699.

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