Can International Environmental Cooperation Be Bought?
AbstractIn this working paper a two-stage game of international environmental agreement formation with asymmetric countries is analytically solved. The equilibrium of the game allows to determine the number of countries interested in signing the agreement. Two cases are studied. In the first case, the countries differ only in the abatement costs, and in the second case, in the environmental damages. In both cases, two different institutional settings, one without side payments and another with side payments, are considered. The results establish that the asymmetry assumption has no important effects on the scope of cooperation in comparison with the symmetric case if side payments are not used or the only difference among countries is given by the abatement costs. However, when the only difference is given by the environmental damages, the result is that the level of cooperation that can be bought through a self-financed side payment system increases with the degree of asymmetry.
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Bibliographic InfoPaper provided by Fundacion BBVA / BBVA Foundation in its series Working Papers with number 2010101.
Date of creation: Mar 2008
Date of revision:
Self-enforcing international environmental agreements; linear environmental damages; public bad.;
Other versions of this item:
- Fuentes-Albero, Cristina & Rubio, Santiago J., 2010. "Can international environmental cooperation be bought?," European Journal of Operational Research, Elsevier, vol. 202(1), pages 255-264, April.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
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