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Emissions Trading Regimes and Incentives to Participate in International Climate Agreements

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  • Barbara Buchner

    (Fondazione Eni Enrico Mattei)

  • Carlo Carraro

    (University of Venice, Fondazione Eni Enrico Mattei, CEPR, CESifo and CEPS)

Abstract

This paper analyses whether different emissions trading regimes provide different incentives to participate in a cooperative climate agreement. Different incentive structures are discussed for those countries, namely the US, Russia and China, that are most important in the climate negotiation process. Our analysis confirms the conjecture that, by appropriately designing the emission trading regime, it is possible to enhance the incentives to participate in a climate agreement. Therefore, participation and optimal policy should be jointly analysed. Moreover, our results show that the US, Russia and China have different most preferred climate coalitions and therefore adopt conflicting negotiation strategies.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2003.104.

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Date of creation: Nov 2003
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Handle: RePEc:fem:femwpa:2003.104

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Keywords: Agreements; Climate; Incentives; Negotiations; Policy;

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References

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  1. Nordhaus, William D & Yang, Zili, 1996. "A Regional Dynamic General-Equilibrium Model of Alternative Climate-Change Strategies," American Economic Review, American Economic Association, vol. 86(4), pages 741-65, September.
  2. Carlo Carraro & Barbara Buchner, 2003. "China and the Evolution of the Present Climate Regime," Working Papers 2003.103, Fondazione Eni Enrico Mattei.
  3. Alan S. Manne & Richard G. Richels, 1999. "The Kyoto Protocol: A Cost-Effective Strategy for Meeting Environmental Objectives?," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 1-23.
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Cited by:
  1. Wu, Pei-Ing & Chen, Chai Tzu & Cheng, Pei-Ching & Liou, Je-Liang, 2014. "Climate game analyses for CO2 emission trading among various world organizations," Economic Modelling, Elsevier, vol. 36(C), pages 441-446.
  2. Michael Finus & Johan Eyckmans, 2003. "New Roads to International Environmental Agreements: The Case of Global Warming," Working Papers 2003.88, Fondazione Eni Enrico Mattei.
  3. Buchner, Barbara & Carraro, Carlo & Ellerman, A Denny, 2006. "The Allocation of European Union Allowances. Lessons, Unifying Themes and General Principles," CEPR Discussion Papers 5843, C.E.P.R. Discussion Papers.
  4. Michael Finus & Juan-Carlos Altamirano-Cabrera & Ekko Ierland, 2005. "The effect of membership rules and voting schemes on the success of international climate agreements," Public Choice, Springer, vol. 125(1), pages 95-127, July.
  5. Michael Finus & Ekko van Ierland, 2003. "Stability of Climate Coalitions in a Cartel Formation Game," Working Papers 2003.61, Fondazione Eni Enrico Mattei.

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