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Cooperation vs. free riding in international environmental affairs: two approaches

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  • TULKENS, Henry

    ()
    (Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium)

Abstract

Two theses on the likelihood of international cooperation for achieving international optimality in transboundary pollution problems are being confronted: a pessimistic one and an optimistic one. On the one hand a “Small Stable Coalitions” (SSC) thesis — based on the stability of coali- tions literature and put forward in several papers by Barrett, Carraro and Siniscalco — holds the view that only small subsets of the countries involved in a transfrontier pollution problem can ever emerge as a group and sign a treaty among themselves; on the other hand a “Grand Stable Coalition” (GSC) thesis — inspired by classical cooperative game theory and proposed by Chander and Tulkens — presents the contents of a feasi- ble treaty which the authors show to enjoy some “core property”, that is, to be more beneficial not only for all countries taken individually, as com- pared to a no treaty situation, but also more beneficial for all subgroups of them, for any partial treaty they might sign among themselves. The two views are formally developed in Section III, after that a presen- tation is given in Section II of the common underlying economic model of international environmental externalities. Section IV then identifies and discusses several game theoretic differences and similarities between the two approaches, namely those bearing on the notion of “coalition”, on the phenomenon of “free riding” in its relation with “threats” in games with externalities, on the uses of the concept of “characteristic function” in co- operative games (with a suggested extension, designed towards reconciling the two approaches), and finally on the roˆle of transfers and “side pay- ments” in the international polution problem under consideration. The concluding section stresses the fact that essentially two different notions of group stability lie at the root of these diverging views.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1997052.

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Date of creation: 01 Jul 1997
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Handle: RePEc:cor:louvco:1997052

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Cited by:
  1. Parkash Chander, 2004. "The Gamma-Core and Coalition Formation," Econometric Society 2004 North American Summer Meetings 108, Econometric Society.
  2. Porchiung Chou & Cheickna Sylla, 2008. "The formation of an international environmental agreement as a two-stage exclusive cartel formation game with transferable utilities," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 8(4), pages 317-341, December.
  3. VAN STEENBERGHE, Vincent, 2004. "Core-stable and equitable allocations of greenhouse gas emission permits," CORE Discussion Papers 2004075, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. Carraro, Carlo & Eyckmans, Johan & Finus, Michael, 2005. "Optimal Transfers and Participation Decisions in International Environmental Agreements," CEPR Discussion Papers 5046, C.E.P.R. Discussion Papers.
  5. Mazzanti, Massimiliano, 2001. "The role of economics in global management of whales: re-forming or re-founding IWC?," Ecological Economics, Elsevier, vol. 36(2), pages 205-221, February.
  6. Santiago J. Rubio & Alistair Ulph, 2006. "Self-enforcing international environmental agreements revisited," Oxford Economic Papers, Oxford University Press, vol. 58(2), pages 233-263, April.
  7. Bosello, Francesco & Buchner, Barbara & Carraro, Carlo & Raggi, Davide, 2003. "Can Equity Enhance Efficiency? Some Lessons from Climate Negotiations," CEPR Discussion Papers 3606, C.E.P.R. Discussion Papers.
  8. Sudhir A. Shah, 2006. "A Non-Cooperative Theory Of Quantity-Rationing International Transfrontier Pollution," Working papers 143, Centre for Development Economics, Delhi School of Economics.
  9. Johan Eyckmans & Henry Tulkens, 1999. "Simulating with RICE Coalitionally Stable Burden Sharing Agreements for the Climate Change Problem," CESifo Working Paper Series 228, CESifo Group Munich.
  10. Goulder, Lawrence H. & Pizer, William A., 2006. "The Economics of Climate Change," Discussion Papers dp-06-06, Resources For the Future.
  11. Johan Eyckmans & Michael Finus, 2007. "Measures to enhance the success of global climate treaties," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 7(1), pages 73-97, March.

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