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The Impact of Equity-preferences on the Stability of Heterogeneous International Agreements

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Author Info
Lange, Andreas

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Abstract

This paper studies the impact of equity considerations on the stability of international agreements between heterogeneous countries. We show that allowing countries to finance abatement projects in developing countries which, due to equity-reasons, have no binding emission targets can reduce the number of cooperating countries and thereby be welfare-decreasing. Equity-concerns in industrialized countries regarding the gap between per-capita emission levels of industrialized and developing countries lead to an increased reduction in industrialized countries but do not qualitatively change the incentives to cooperate. Only if countries are inequality-averse with respect to potential differences between their abatement targets and those of other industrialized countries is the inclusion of developing countries generally profitable both in terms of participation rates and of emission reduction.

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 04-50.

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Date of creation: 2004
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Handle: RePEc:zbw:zewdip:2188

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Related research
Keywords: international environmental negotiations equity preference coalition formation per capita emission levels inequality aversion

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Find related papers by JEL classification:
C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General

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  1. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen. [Downloadable!] (restricted)
  2. Murdoch, James C. & Sandler, Todd, 1997. "The voluntary provision of a pure public good: The case of reduced CFC emissions and the Montreal Protocol," Journal of Public Economics, Elsevier, vol. 63(3), pages 331-349, February. [Downloadable!] (restricted)
  3. Böhringer, Christoph & Helm, Carsten, 2001. "Fair division with general equilibrium effects and international climate politics," ZEW Discussion Papers 01-67, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  4. 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)
  5. 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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  6. Barrett, Scott, 2001. "International cooperation for sale," European Economic Review, Elsevier, vol. 45(10), pages 1835-1850, December. [Downloadable!] (restricted)
  7. Bohringer, Christoph & Vogt, Carsten, 2004. "The dismantling of a breakthrough: the Kyoto Protocol as symbolic policy," European Journal of Political Economy, Elsevier, vol. 20(3), pages 597-617, September. [Downloadable!] (restricted)
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  1. Lange, Andreas & Vogt, Carsten & Ziegler, Andreas, 2006. "On the Importance of Equity in International Climate Policy: An Empirical Analysis," ZEW Discussion Papers 06-42, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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  2. Lange, Andreas & Löschel, Andreas & Vogt, Carsten & Ziegler, Andreas, 2007. "On the Self-serving Use of Equity Principles in International Climate Negotiations," ZEW Discussion Papers 07-025, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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