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Informational benefits of international environmental agreements

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Author Info
Amihai Glazer
Stef Proost

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Abstract

Given the difficulty of monitoring, and even more so of enforcing, International Environmental Agreements, it is surprising that they are signed and implemented. This paper offers a theoretical model, which addresses this issue. The focus is on informational and coordination problems. A country which is unsure about the benefits of environmental policy may find that the benefits are higher the greater the number of other countries which lean towards taking action. Whereas each country may individually take weak environmental action, in equilibrium several countries may take strong action if they expect others to. An International Environmental Agreement can thus be selfenforcing. Such effects can appear even if international environmental spillovers are absent, and even if monitoring and enforcement are infeasible. Our approach can explain additional phenomena: why a country known to care little about the environment may deeply influence other countries if it takes strong environmental action, why lags may appear between the signing of an agreement and its implementation, and how requirements for approval by several bodies within a country can increase support for environmental action.

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Publisher Info
Paper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën in its series Center for Economic Studies - Discussion papers with number ces0814.

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Date of creation: May 2008
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Handle: RePEc:ete:ceswps:ces0814

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Related research
Keywords: Environmental policy; international agreements; signaling; regulation;

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Find related papers by JEL classification:
Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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    Other versions:
  2. Klemperer, Paul, 1995. "Competition When Consumers Have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade," Review of Economic Studies, Blackwell Publishing, vol. 62(4), pages 515-39, October. [Downloadable!] (restricted)
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  4. Wolfgang Buchholz & Alexander Haupt & Wolfgang Peters, 2005. "International Environmental Agreements and Strategic Voting," Scandinavian Journal of Economics, Blackwell Publishing, vol. 107(1), pages 175-195, 03. [Downloadable!] (restricted)
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