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Optimal Transfers and Participation Decisions in International Environmental Agreements

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  • Carraro, Carlo
  • Eyckmans, Johan
  • Finus, Michael

Abstract

The literature on international environmental agreements has recognized the role transfers play in encouraging participation in international environmental agreements (IEAs), but the few results achieved so far are overly specific and do not exploit the full potential of transfers for successful treaty-making. Therefore, in this paper, we develop a framework that enables us to study the role of transfers in a more systematic way. We propose a design for transfers using both internal and external financial resources and making 'welfare optimal agreements' self-enforcing. To illustrate the relevance of our transfer scheme for actual treaty-making, we use a well-known integrated assessment model of climate change to show how appropriate transfers may be able to induce almost all countries into signing a self-enforcing climate treaty.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5046.

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Date of creation: May 2005
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Handle: RePEc:cpr:ceprdp:5046

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Keywords: climate policy; international environmental agreements; self-enforcing international environmental agreements; transfers;

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