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Time-Inconsistent Domestic Environmental Policies and Optimal International Environmental Arrangements

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Author Info
Aekapol Chongvilaivan
Jung Hur

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Abstract

We employ the standard pollution control incorporating countries' asymmetries, not only in their consumption and environmental concerns, but also in their environmental technologies. First, we show that the absence of international collaboration makes domestic environmental policies discretionary and may result in a time-inconsistent outcome. Then, we compare two cooperative regimes: the international environmental agreement (IEA) and the central environmental authority (CEA). In certain conditions, IEAs may not be more efficient than CEAs in pollution abatement. Furthermore, although the IEA Pareto-dominates the CEA, the success of IEAs may be hampered by conflicts of interest among the signatories.

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Publisher Info
Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

Volume (Year): 163 (2007)
Issue (Month): 4 (December)
Pages: 731-758
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Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200712)163:4_731:tdepao_2.0.tx_2-6

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Find related papers by JEL classification:
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
F18 - International Economics - - Trade - - - Trade and Environment

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