The Impact of Equity-preferences on the Stability of Heterogeneous International Agreements
AbstractThis 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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Bibliographic InfoPaper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 04-50.
Date of creation: 2004
Date of revision:
international environmental negotiations; equity preference; coalition formation; per capita emission levels; inequality aversion;
Find related papers by JEL classification:
- Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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