Informational Benefits of International Environmental Agreements
AbstractGiven that it is difficult to monitor, and even more so to enforce, International Environmental Agreements, it is surprising that they are signed and implemented. This paper offers a theoretical model, which addresses the phenomena. The focus is on informational and coordination problems--a country which is unsure about the benefits of environmental policy may believe that the benefits are higher the greater the number of other countries which lean towards taking action. Whereas each country may individually take no environmental action, in equilibrium several countries may take environmental action if they expect others to. An International Environmental Agreement can thus be self-enforcing. 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 that is known to care little about the environment may deeply influence other countries if it takes 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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Bibliographic InfoPaper provided by University of California-Irvine, Department of Economics in its series Working Papers with number 070810.
Length: 17 pages
Date of creation: Feb 2008
Date of revision:
Environmental policy; International agreements; Signaling; Regulation;
Other versions of this item:
- Amihai Glazer & Vesa Kanniainen & Panu Poutvaara, 2008. "Informational Benefits of International Environmental Agreements," Working Papers 070818, University of California-Irvine, Department of Economics.
- Amihai Glazer & Stef Proost, 2008. "Informational benefits of international environmental agreements," Center for Economic Studies - Discussion papers ces0814, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
- 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; Mechanism Design
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-02-16 (All new papers)
- NEP-ENV-2008-02-16 (Environmental Economics)
- NEP-REG-2008-02-16 (Regulation)
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