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Coalition Formation and the Ancillary Benefits of Climate Policy

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Author Info
Finus, Michael
Rübbelke, Dirk T.G.

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Abstract

Several studies found ancillary benefits of environmental policy to be of considerable size. These additional private benefits imply not only higher cooperative but also noncooperative abatement targets. However, beyond these largely undisputed important quantitative effects, there are qualitative and strategic implications associated with ancillary benefits: climate policy is no longer a pure but an impure public good. In this paper, we investigate these implications in a setting of non-cooperative coalition formation. In particular, we address the following questions. 1) Do ancillary benefits increase participation in international environmental agreements? 2) Do ancillary benefits raise the success of these treaties in welfare terms?

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Paper provided by University of Stirling, Department of Economics in its series Stirling Economics Discussion Papers with number 2008-13.

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Date of creation: Jul 2008
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Handle: RePEc:stl:stledp:2008-13

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Related research
Keywords: ancillary benefits; climate policy; coalition formation; game theory; impure public goods;

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  1. Sébastien Dessus & David O'Connor, 2003. "Climate Policy without Tears CGE-Based Ancillary Benefits Estimates for Chile," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 25(3), pages 287-317, July. [Downloadable!] (restricted)
  2. Alistair Ulph, 2004. "Stable International Environmental Agreements with a Stock Pollutant, Uncertainty and Learning," Journal of Risk and Uncertainty, Springer, vol. 29(1), pages 53-73, 07. [Downloadable!]
  3. Dubin, Jeffrey A & Navarro, Peter, 1988. "How Markets for Impure Public Goods Organize: The Case of Household Refuse Collection," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(2), pages 217-41, Fall.
  4. Kotchen, Matthew J. & Moore, Michael R., 2007. "Private provision of environmental public goods: Household participation in green-electricity programs," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 1-16, January. [Downloadable!] (restricted)
  5. Effrosyni Diamantoudi & Eftichios S. Sartzetakis, 2006. "Stable International Environmental Agreements: An Analytical Approach," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(2), pages 247-263, 05. [Downloadable!] (restricted)
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  6. Matthew J. Kotchen, 2006. "Green Markets and Private Provision of Public Goods," Journal of Political Economy, University of Chicago Press, vol. 114(4), pages 816-845, August. [Downloadable!] (restricted)
  7. Ekin, Paul, 1996. "The secondary benefits of CO2 abatement: How much emission reduction do they justify?," Ecological Economics, Elsevier, vol. 16(1), pages 13-24, January. [Downloadable!] (restricted)
  8. Kolstad, Charles D., 2007. "Systematic uncertainty in self-enforcing international environmental agreements," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 68-79, January. [Downloadable!] (restricted)
  9. Cornes, Richard & Sandler, Todd, 1994. "The comparative static properties of the impure public good model," Journal of Public Economics, Elsevier, vol. 54(3), pages 403-421, July. [Downloadable!] (restricted)
  10. Khanna, J. & Huffman, Wallace & Sandler, T., 2003. "Agricultural Research Expenditures in the United States: A Public Goods Perspective," Staff General Research Papers 10994, Iowa State University, Department of Economics.
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  11. Sandler, Todd & Murdoch, James C, 1990. "Nash-Cournot or Lindahl Behavior? An Empirical Test for the NATO Allies," The Quarterly Journal of Economics, MIT Press, vol. 105(4), pages 875-94, November. [Downloadable!] (restricted)
  12. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December. [Downloadable!] (restricted)
  13. Kotchen, Matthew J., 2005. "Impure public goods and the comparative statics of environmentally friendly consumption," Journal of Environmental Economics and Management, Elsevier, vol. 49(2), pages 281-300, March. [Downloadable!] (restricted)
  14. Oran R. Young, 2003. "Environment and Statecraft: The Strategy of Environmental Treaty-Making," Global Environmental Politics, MIT Press, vol. 3(1), pages 145-147, 02. [Downloadable!] (restricted)
  15. Burtraw, Dallas & Krupnick, Alan & Palmer, Karen & Paul, Anthony & Toman, Michael & Bloyd, Cary, 2003. "Ancillary benefits of reduced air pollution in the US from moderate greenhouse gas mitigation policies in the electricity sector," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 650-673, May. [Downloadable!] (restricted)
  16. 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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  17. 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)
  18. Maurizio Bussolo & David O’Connor, 2001. "Clearing the Air in India: The Economics of Climate Policy with Ancillary Benefits," OECD Development Centre Working Papers 182, OECD, Development Centre. [Downloadable!]
  19. Michael Finus & Stefan Maus, 2008. "Modesty May Pay!," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(5), pages 801-826, October. [Downloadable!] (restricted)
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