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Optimal Transfers and Participation Decisions in International Environmental Agreements

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Author Info
Carlo Carraro (University of Venice)
Johan Eyckmans (Europese Hogeschool Brussel and Katholieke Universiteit Leuven, Centrum voor Economische Studiën)
Michael Finus (University of Hagen)

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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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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2005.50.

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Date of creation: Apr 2005
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Handle: RePEc:fem:femwpa:2005.50

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Related research
Keywords: Self-enforcing international environmental agreements; Climate policy; Transfers;

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Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Juan-Carlos Altamirano-Cabrera & Michael Finus, 2006. "Permit trading and stability of international climate agreements," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 19-48, May. [Downloadable!] (restricted)
  2. Johan Eyckmans & Michael Finus, 2003. "Coalition Formation in a Global Warming Game: How the Design of Protocols Affects the Success of Environmental Treaty-Making," Energy, Transport and Environment Working Papers Series ete0317, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment. [Downloadable!]
    Other versions:
  3. Johan Eyckmans & Michael Finus, 2004. "An Empirical Assessment of Measures to Enhance the Success of Global Climate Treaties," Energy, Transport and Environment Working Papers Series ete0406, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment. [Downloadable!]
  4. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen. [Downloadable!] (restricted)
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  6. Hans-Peter Weikard & Juan-Carlos Altamirano-Cabrera & Michael Finus, 2004. "The Impact of Surplus Sharing on The Stability of International Climate Agreements," Working Papers 2004.99, Fondazione Eni Enrico Mattei. [Downloadable!]
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  7. Finus, Michael & S?Iz, M. Elena & Hendrix, Eligius M.T., 2009. "An empirical test of new developments in coalition theory for the design of international environmental agreements," Environment and Development Economics, Cambridge University Press, vol. 14(01), pages 117-137, February. [Downloadable!]
  8. Petrakis, Emmanuel & Xepapadeas, Anastasios, 1996. "Environmental consciousness and moral hazard in international agreements to protect the environment," Journal of Public Economics, Elsevier, vol. 60(1), pages 95-110, April. [Downloadable!] (restricted)
  9. 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. [Downloadable!] (restricted)
  10. 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. [Downloadable!] (restricted)
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  13. Henry Tulkens & Parkash Chander, 1997. "The Core of an Economy with Multilateral Environmental Externalities," International Journal of Game Theory, Springer, vol. 26(3), pages 379-401.
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  14. Michael Hoel & Kerstin Schneider, 1997. "Incentives to participate in an international environmental agreement," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 9(2), pages 153-170, March. [Downloadable!] (restricted)
  15. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October. [Downloadable!] (restricted)
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  16. Michael Hoel, 1992. "International environment conventions: The case of uniform reductions of emissions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 2(2), pages 141-159, March. [Downloadable!] (restricted)
  17. Barrett, Scott, 2001. "International cooperation for sale," European Economic Review, Elsevier, vol. 45(10), pages 1835-1850, December. [Downloadable!] (restricted)
  18. Kaitala, Veijo & Maler, Karl-Goran & Tulkens, Henry, 1995. " The Acid Rain Game as a Resource Allocation Process with an Application to the International Cooperation among Finland, Russia and Estonia," Scandinavian Journal of Economics, Blackwell Publishing, vol. 97(2), pages 325-43, June.
  19. Eyckmans, Johan & Tulkens, Henry, 2003. "Simulating coalitionally stable burden sharing agreements for the climate change problem," Resource and Energy Economics, Elsevier, vol. 25(4), pages 299-327, October. [Downloadable!] (restricted)
  20. 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. [Downloadable!] (restricted)
  21. Johan Eyckmans & Michael Finus, 2004. "An Almost Ideal Sharing Scheme for Coalition Games with Externalities," Energy, Transport and Environment Working Papers Series ete0414, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment. [Downloadable!]
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Dritan Osmani & Richard S.J. Tol, 2008. "Evolution in time of Farsightedly Stable Coalitions: An Application of FUND," Working Papers FNU-162, Research unit Sustainability and Global Change, Hamburg University, revised May 2008. [Downloadable!]
  2. Kohnz, Simone, 2006. "Ratification quotas in international agreements," Discussion Papers in Economics 900, University of Munich, Department of Economics. [Downloadable!]
  3. Gersbach, Hans & Winkler, Ralph, 2007. "On the Design of Global Refunding and Climate Change," CEPR Discussion Papers 6379, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Carlo Carraro & Barbara Buchner, 2006. "Parallel Climate Blocs. Incentives to cooperation in international climate negotiations," Working Papers 2006_45, University of Venice "Ca' Foscari", Department of Economics. [Downloadable!]
  5. Michael Finus & Bianca Rundshagen, 2009. "Membership rules and stability of coalition structures in positive externality games," Social Choice and Welfare, Springer, vol. 32(3), pages 389-406, March. [Downloadable!] (restricted)
  6. Thierry Bréchet & François Gerard, 2007. "Climate Coalitions: A Theoretical and Computational Appraisal," Working Papers 2007.21, Fondazione Eni Enrico Mattei. [Downloadable!]
  7. Valentina Bosetti & Carlo Carraro & Alessandra Sgobbi & Massimo Tavoni, 2008. "Modelling Economic Impacts of Alternative International Climate Policy Architectures. A Quantitative and Comparative Assessment of Architectures for Agreement," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  8. Hans-Peter Weikard & Rob Dellink, 2008. "Sticks and Carrots for the Design of International Climate Agreements with Renegotiations," Working Papers 2008.26, Fondazione Eni Enrico Mattei. [Downloadable!]
  9. Valentina Bosetti & Carlo Carraro & Enrica De Cian & Romain Duval & Emanuele Massetti & Massimo Tavoni, 2009. "The Incentives to Participate in, and the Stability of, International Climate Coalitions: A Game-theoretic Analysis Using the Witch Model," Working Papers 2009.64, Fondazione Eni Enrico Mattei. [Downloadable!]
  10. Partha Sen, 2008. "Fdeveloping Economies And The Environment - The Role Of Trade And Capital Flows," Working papers 172, Centre for Development Economics, Delhi School of Economics. [Downloadable!]
  11. Miyuki Nagashima & Rob Dellink, 2008. "Technology spillovers and stability of international climate coalitions," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 8(4), pages 343-365, December. [Downloadable!] (restricted)
    Other versions:
  12. Thierry, BRECHET & Franois, GERARD & Henry, TULKENS, 2007. "Climate coalitions : a theoretical and computational appraisal," Discussion Papers (ECON - Département des Sciences Economiques) 2007006, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
    Other versions:
  13. Nicola Cantore & Emilio Padilla Rosa, 2009. "Emissions distribution in post–Kyoto international negotiations: a policy perspective," Working Papers wpdea0907, Department of Applied Economics at Universitat Autonoma of Barcelona. [Downloadable!]
  14. Dritan Osmani & Richard S.J. Tol, 2007. "A short note on joint welfare maximization assumptions," Working Papers FNU-150, Research unit Sustainability and Global Change, Hamburg University, revised Oct 2007. [Downloadable!]
    Other versions:
  15. Dritan Osmani & Richard S.J. Tol, 2007. "Toward Farsightedly Stable International Environmental Agreements, Part two," Working Papers FNU-149, Research unit Sustainability and Global Change, Hamburg University, revised Oct 2007. [Downloadable!]
  16. Marta Biancardi & Giovanni Villani, 2009. "International Environmental Agreements with Asymmetric Countries," Quaderni DSEMS 09-2009, Dipartimento di Scienze Economiche, Matematiche e Statistiche, Universita' di Foggia. [Downloadable!]
  17. Michael Finus & Pedro Pintassilgo & Marko Lindroos & Gordon Munro, 2008. "Stability and Success of Regional Fisheries Management Organizations," Working Papers 2008.20, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  18. 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. [Downloadable!] (restricted)
  19. Carlo Carraro, 2006. "Incentives and Institutions. A Bottom-up Approach to Climate Policy," Working Papers 2006_49, University of Venice "Ca' Foscari", Department of Economics. [Downloadable!]
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