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

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  • Lange, Andreas

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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Bibliographic Info

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
Date of revision:
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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References

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  1. Carraro, Carlo & Siniscalco, Domenico, 1991. "Strategies for the International Protection of the Environment," CEPR Discussion Papers 568, C.E.P.R. Discussion Papers.
  2. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen.
  3. 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.
  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.
  5. 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.
  6. Böhringer, Christoph & Helm, Carsten, 2002. "Fair Division with General Equilibrium Effects and International Climate Politics," Publications of Darmstadt Technical University, Institute of Economics (VWL) 33285, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL).
  7. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  8. Toman, Michael & Shogren, Jason, 2000. "Climate Change Policy," Discussion Papers dp-00-22, Resources For the Future.
  9. Barrett, Scott, 2001. "International cooperation for sale," European Economic Review, Elsevier, vol. 45(10), pages 1835-1850, December.
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Citations

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Cited by:
  1. Lange, Andreas & Löschel, Andreas & Vogt, Carsten & Ziegler, Andreas, 2010. "On the self-interested use of equity in international climate negotiations," European Economic Review, Elsevier, vol. 54(3), pages 359-375, April.
  2. Kverndokk, Snorre & Rose, Adam, 2008. "Equity and justice in global warming policy," MPRA Paper 24272, University Library of Munich, Germany.
  3. 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.
  4. Lange, Andreas & Vogt, Carsten & Ziegler, Andreas, 2007. "On the importance of equity in international climate policy: An empirical analysis," Energy Economics, Elsevier, vol. 29(3), pages 545-562, May.
  5. Vogt, Carsten & Sturm, Bodo, 2011. "Implications of inequality aversion for international climate policy," ZEW Discussion Papers 11-050, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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