Stable International Environmental Agreements with a Stock Pollutant, Uncertainty and Learning
AbstractIn this paper I address the question of how uncertainty about damage costs and the possibility of resolving that uncertainty in the future affects the incentives for countries to join an international environmental agreement. I use a two-period model with a stock pollutant where the number of countries generating pollution can be arbitrarily large. The stability concept employed is such that size of the stable IEA can be anywhere between 2 and the grand coalition of all countries depending on parameter values. The dynamic structure allows two different membership rules for an IEA: fixed (countries commit at the outset to be members for both periods) or variable (countries decide each period whether to join). I show that with fixed membership learning results in at least as high membership and global welfare as no learning (unless both the expected value and variance of damage costs are high). With variable membership, learning leads to higher membership (in the second period) but lower global welfare than no learning. For most parameter values variable membership results in higher global welfare than fixed membership.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Journal of Risk and Uncertainty.
Volume (Year): 29 (2004)
Issue (Month): 1 (07)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100299
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- David M. McEvoy, 2009.
"Not It: Opting out of Voluntary Coalitions that Provide a Public Good,"
09-14, Department of Economics, Appalachian State University.
- David McEvoy, 2010. "Not it: opting out of voluntary coalitions that provide a public good," Public Choice, Springer, vol. 142(1), pages 9-23, January.
- Hong, Fuhai & Karp, Larry, 2012.
"International Environmental Agreements with Mixed Strategies and Investment,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
qt0xf976x1, Department of Agricultural & Resource Economics, UC Berkeley.
- Hong, Fuhai & Karp, Larry, 2012. "International Environmental Agreements with mixed strategies and investment," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 685-697.
- Hong, Fuhai & Karp, Larry, 2012. "International environmental agreements with mixed strategies and investment," CUDARE Working Paper Series 1129, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Thijs Dekker & Rob Dellink & Janina Ketterer, 2013. "The Fatter the Tail, the Fatter the Climate Agreement - Simulating the Influence of Fat Tails in Climate Change Damages on the Success of International Climate Negotiations," CESifo Working Paper Series 4059, CESifo Group Munich.
- Dimitrios Diamantaras & Robert P. Gilles, 2010.
"Ambiguity, Social Opinion and the Use of Common Property Resources,"
DETU Working Papers
1006, Department of Economics, Temple University.
- Diamantaras, Dimitrios & Gilles, Robert P., 2011. "Ambiguity, social opinion and the use of common property resources," Journal of Economic Behavior & Organization, Elsevier, vol. 80(1), pages 210-222.
- Charles Kolstad & Alistair Ulph, 2011. "Uncertainty, Learning and Heterogeneity in International Environmental Agreements," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 50(3), pages 389-403, November.
- Lessmann, Kai & Marschinski, Robert & Finus, Michael & Kornek, Ulrike & Edenhofer, Ottmar, 2010. "Emissions Trading with Non-signatories in a Climate Agreement : An Analysis of Coalition Stability," Department of Economics Working Papers 32512, University of Bath, Department of Economics.
- Ingham, Alan & Ma, Jie & Ulph, Alistair, 2007. "Climate change, mitigation and adaptation with uncertainty and learning," Energy Policy, Elsevier, vol. 35(11), pages 5354-5369, November.
- Dellink, Rob & Finus, Michael, 2009.
"Uncertainty and Climate Treaties: Does Ignorance Pay?,"
Stirling Economics Discussion Papers
2009-15, University of Stirling, Division of Economics.
- Dellink, Rob & Finus, Michael, 2012. "Uncertainty and climate treaties: Does ignorance pay?," Resource and Energy Economics, Elsevier, vol. 34(4), pages 565-584.
- David M. McEvoy & James J. Murphy & John M. Spraggon & John K. Stranlund, 2010.
"The problem of maintaining compliance within stable coalitions: experimental evidence,"
2010-02, University of Alaska Anchorage, Department of Economics.
- David M. McEvoy & James J. Murphy & John M. Spraggon & John K. Stranlund, 2011. "The problem of maintaining compliance within stable coalitions: experimental evidence," Oxford Economic Papers, Oxford University Press, vol. 63(3), pages 475-498, July.
- David M. McEvoy & James J. Murphy & John M. Spraggon & John K. Stranlund, 2008. "The Problem of Maintaining Compliance within Stable Coalitions: Experimental Evidence," Working Papers 2008-2, University of Massachusetts Amherst, Department of Resource Economics.
- David M. McEvoy & James J. Murphy & John M. Spraggon & John K. Stranlund, 2008. "The Problem of Maintaining Compliance within Stable Coalitions: Experimental Evidence," Working Papers 08-10, Department of Economics, Appalachian State University.
- Larry Karp, 2012. "The effect of learning on membership and welfare in an International Environmental Agreement," Climatic Change, Springer, vol. 110(3), pages 499-505, February.
- Michael Finus & Dirk T.G. Rübbelke, 2008.
"Coalition Formation and the Ancillary Benefits of Climate Policy,"
2008.62, Fondazione Eni Enrico Mattei.
- Finus, Michael & Rubbelke, Dirk T G, 2008. "Coalition Formation and the Ancillary Benefits of Climate Policy," Stirling Economics Discussion Papers 2008-13, University of Stirling, Division of Economics.
- Vincent Boucher & Yann Bramoullé, 2007. "Risk Aversion and International Environmental Agreements," Cahiers de recherche 0739, CIRPEE.
- Boucher, Vincent & Bramoullé, Yann, 2010. "Providing global public goods under uncertainty," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 591-603, October.
- Hans-Peter Weikard & Rob Dellink, 2008. "Sticks and Carrots for the Design of International Climate Agreements with Renegotiations," Working Papers 2008.26, Fondazione Eni Enrico Mattei.
- Kolstad, Charles D., 2007. "Systematic uncertainty in self-enforcing international environmental agreements," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 68-79, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.