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Dynamic Models for International Environmental Agreements

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  • Michèle Breton

    (GERAD, CREF and HEC Montréal)

  • Lucia Sbragia

    (GERAD and HEC Montréal)

  • Georges Zaccour

    (GERAD and Chair in Game Theory & Management HEC Montréal)

Abstract

In this paper we develop a model to analyze, in a dynamic framework, how countries join international environmental agreements (IEAs). In the model, where countries suffer from the same environmental damage as a result of the total global emissions, a non-signatory country decides its emissions by maximizing its own welfare, whereas a signatory country decides its emissions by maximizing the aggregate welfare of all signatory countries. Signatory countries are assumed to be able to punish the non-signatories at a cost. When countries decide on their pollution emissions they account for the evolution of the pollution over time. Moreover, we propose a mechanism to describe how countries reach a stable IEA. The model is able to capture situations with partial cooperation in an IEA stable over time. It also captures situations where all countries participate in a stable agreement, or situations where no stable agreement is feasible. When more than one possibility coexists, the long-term outcome of the game depends on the initial conditions (i.e. the size of the initial group of signatory countries and the pollution level).

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2008.33.

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Date of creation: Mar 2008
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Handle: RePEc:fem:femwpa:2008.33

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Related research

Keywords: International Environmental Agreements; Non-Cooperative Dynamic Game; Coalition Stability;

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References

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  1. Rubio, S. J. & Ulph, A., 2002. "An infinite-horizon model of dynamic membership of international environmental agreements," Discussion Paper Series In Economics And Econometrics 0210, Economics Division, School of Social Sciences, University of Southampton.
  2. Santiago J. Rubio & Alistair Ulph, 2006. "Self-enforcing international environmental agreements revisited," Oxford Economic Papers, Oxford University Press, vol. 58(2), pages 233-263, April.
  3. Rubio, Santiago J. & Casino, Begona, 2002. "A note on cooperative versus non-cooperative strategies in international pollution control," Resource and Energy Economics, Elsevier, vol. 24(3), pages 251-261, June.
  4. Barrett, Scott, 1997. "The strategy of trade sanctions in international environmental agreements," Resource and Energy Economics, Elsevier, vol. 19(4), pages 345-361, November.
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Citations

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Cited by:
  1. Emilio Calvo & Santiago J. Rubio, 2012. "Dynamic Models of International Environmental Agreements: A Differential Game Approach," Discussion Papers in Economic Behaviour 0112, University of Valencia, ERI-CES.
  2. Peter Egger & Christoph Jeßberger & Mario Larch, 2011. "Trade and investment liberalization as determinants of multilateral environmental agreement membership," International Tax and Public Finance, Springer, vol. 18(6), pages 605-633, December.
  3. Benchekroun, Hassan & Ray Chaudhuri, Amrita, 2011. "Environmental policy and stable collusion: The case of a dynamic polluting oligopoly," Journal of Economic Dynamics and Control, Elsevier, vol. 35(4), pages 479-490, April.
  4. Olivier Bos & Béatrice Roussillon & Paul Schweinzer, 2013. "Agreeing on Efficient Emissions Reduction," CESifo Working Paper Series 4345, CESifo Group Munich.

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