IDEAS home Printed from https://ideas.repec.org/a/bla/jeurec/v14y2016i3p719-752.html
   My bibliography  Save this article

The Dynamics Of Climate Agreements

Author

Listed:
  • Bård Harstad

Abstract

This paper analyzes a framework in which countries over time pollute and invest in green technologies. Without a climate treaty, the countries pollute too much and invest too little, particularly if intellectual property rights are weak. Nevertheless, short-term agreements on emission levels then reduce every country's payoff, since countries invest less when they anticipate future negotiations. If intellectual property rights are weak, the agreement should be tougher and more long-term. Conversely, if the climate agreement happens to be short-term or absent, intellectual property rights should be strengthened or technological licensing subsidized.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Bård Harstad, 2016. "The Dynamics Of Climate Agreements," Journal of the European Economic Association, European Economic Association, vol. 14(3), pages 719-752, June.
  • Handle: RePEc:bla:jeurec:v:14:y:2016:i:3:p:719-752
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/jeea.2016.14.issue-3
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Marco Battaglini & Stephen Coate, 2007. "Inefficiency in Legislative Policymaking: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 97(1), pages 118-149, March.
    2. Leslie M. Marx & Steven A. Matthews, 2000. "Dynamic Voluntary Contribution to a Public Project," Review of Economic Studies, Oxford University Press, vol. 67(2), pages 327-358.
    3. Robert Schmidt & Roland Strausz, 2015. "On the Timing of Climate Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(3), pages 521-547, November.
    4. Tsutsui, Shunichi & Mino, Kazuo, 1990. "Nonlinear strategies in dynamic duopolistic competition with sticky prices," Journal of Economic Theory, Elsevier, vol. 52(1), pages 136-161, October.
    5. Yeon-Koo Che & József Sákovics, 2004. "A Dynamic Theory of Holdup," Econometrica, Econometric Society, vol. 72(4), pages 1063-1103, July.
    6. Michael Hoel & Aart Zeeuw, 2010. "Can a Focus on Breakthrough Technologies Improve the Performance of International Environmental Agreements?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 47(3), pages 395-406, November.
    7. Gerhard Sorger, 1997. "Markov-perfect Nash equilibria in a class of resource games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(1), pages 79-100.
    8. Karp, Larry & Zhao, Jinhua, 2008. "A Proposal for the Design of the Successor to the Kyoto Protocol," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt35n7x8mt, Department of Agricultural & Resource Economics, UC Berkeley.
    9. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
    10. Aldy,Joseph E. & Stavins,Robert N. (ed.), 2009. "Post-Kyoto International Climate Policy," Cambridge Books, Cambridge University Press, number 9780521137850.
    11. Newell, Richard G. & Jaffe, Adam B. & Stavins, Robert N., 2006. "The effects of economic and policy incentives on carbon mitigation technologies," Energy Economics, Elsevier, vol. 28(5-6), pages 563-578, November.
    12. Sergei Guriev & Dmitriy Kvasov, 2005. "Contracting on Time," American Economic Review, American Economic Association, vol. 95(5), pages 1369-1385, December.
    13. Joseph E. Aldy & Scott Barrett & Robert N. Stavins, 2003. "Thirteen plus one: a comparison of global climate policy architectures," Climate Policy, Taylor & Francis Journals, vol. 3(4), pages 373-397, December.
    14. Aghion, Philippe & Dewatripont, Mathias & Rey, Patrick, 1994. "Renegotiation Design with Unverifiable Information," Econometrica, Econometric Society, vol. 62(2), pages 257-282, March.
    15. Tai-Yeong Chung, 1991. "Incomplete Contracts, Specific Investments, and Risk Sharing," Review of Economic Studies, Oxford University Press, vol. 58(5), pages 1031-1042.
    16. Robert Evans, 2008. "Simple Efficient Contracts in Complex Environments," Econometrica, Econometric Society, vol. 76(3), pages 459-491, May.
    17. Rolf Golombek & Michael Hoel, 2005. "Climate Policy under Technology Spillovers," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(2), pages 201-227, June.
    18. Aldy,Joseph E. & Stavins,Robert N. (ed.), 2007. "Architectures for Agreement," Cambridge Books, Cambridge University Press, number 9780521871631.
    19. Frederick Ploeg & Aart Zeeuw, 1992. "International aspects of pollution control," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(2), pages 117-139, March.
    20. Dockner, Engelbert J. & Sorger, Gerhard, 1996. "Existence and Properties of Equilibria for a Dynamic Game on Productive Assets," Journal of Economic Theory, Elsevier, vol. 71(1), pages 209-227, October.
    21. Kolstad, Charles D. & Toman, Michael, 2005. "The Economics of Climate Policy," Handbook of Environmental Economics,in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 30, pages 1561-1618 Elsevier.
    22. Calvo, Emilio & Rubio, Santiago J., 2013. "Dynamic Models of International Environmental Agreements: A Differential Game Approach," International Review of Environmental and Resource Economics, now publishers, vol. 6(4), pages 289-339, April.
    23. Gatsios, Konstantine & Karp, Larry S, 1992. "How Anti-merger Laws Can Reduce Investment, Help Producers, and Hurt Consumers," Journal of Industrial Economics, Wiley Blackwell, vol. 40(3), pages 339-348, September.
    24. Bård Harstad & Francesco Lancia & Alessia Russo, 2015. "Compliance Technology and Self-Enforcing Agreements," CESifo Working Paper Series 5562, CESifo Group Munich.
    25. Akihiko Yanase, 2006. "Dynamic Voluntary Provision of Public Goods and Optimal Steady‐State Subsidies," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(1), pages 171-179, January.
    26. Hoel, Michael, 1993. "Intertemporal properties of an international carbon tax," Resource and Energy Economics, Elsevier, vol. 15(1), pages 51-70, March.
    27. Prajit Dutta & Roy Radner, 2012. "Capital growth in a global warming model: will China and India sign a climate treaty?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 49(2), pages 411-443, February.
    28. Maskin, Eric & Tirole, Jean, 1988. "A Theory of Dynamic Oligopoly, I: Overview and Quantity Competition with Large Fixed Costs," Econometrica, Econometric Society, vol. 56(3), pages 549-569, May.
    29. Dockner Engelbert J. & Van Long Ngo, 1993. "International Pollution Control: Cooperative versus Noncooperative Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 13-29, July.
    30. Hart, Rob, 2008. "The timing of taxes on CO2 emissions when technological change is endogenous," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 194-212, March.
    31. Rubio, Santiago J. & Ulph, Alistair, 2007. "An infinite-horizon model of dynamic membership of international environmental agreements," Journal of Environmental Economics and Management, Elsevier, vol. 54(3), pages 296-310, November.
    32. Wirl, Franz, 1996. "Dynamic voluntary provision of public goods: Extension to nonlinear strategies," European Journal of Political Economy, Elsevier, vol. 12(3), pages 555-560, November.
    33. Houba, Harold & Sneek, Koos & Vardy, Felix, 2000. "Can negotiations prevent fish wars?," Journal of Economic Dynamics and Control, Elsevier, vol. 24(8), pages 1265-1280, July.
    34. Wolfgang Buchholz & Kai Konrad, 1994. "Global environmental problems and the strategic choice of technology," Journal of Economics, Springer, vol. 60(3), pages 299-321, October.
    35. Aldy,Joseph E. & Stavins,Robert N. (ed.), 2007. "Architectures for Agreement," Cambridge Books, Cambridge University Press, number 9780521692175.
    36. Barrett, Scott, 2005. "The theory of international environmental agreements," Handbook of Environmental Economics,in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 28, pages 1457-1516 Elsevier.
    37. Sorger, Gerhard, 2006. "Recursive Nash bargaining over a productive asset," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2637-2659, December.
    38. Dutta, Prajit K. & Radner, Roy, 2009. "A strategic analysis of global warming: Theory and some numbers," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 187-209, August.
    39. Olivier Bos & Béatrice Roussillon & Paul Schweinzer, 2016. "Agreeing on Efficient Emissions Reduction," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(4), pages 785-815, October.
    40. Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329.
    41. David Levhari & Leonard J. Mirman, 1980. "The Great Fish War: An Example Using a Dynamic Cournot-Nash Solution," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 322-334, Spring.
    42. Aldy,Joseph E. & Stavins,Robert N. (ed.), 2009. "Post-Kyoto International Climate Policy," Cambridge Books, Cambridge University Press, number 9780521138000.
    43. Matthew Ellman, 2006. "The optimal length of contracts with application to outsourcing," Economics Working Papers 965, Department of Economics and Business, Universitat Pompeu Fabra.
    44. Aldy,Joseph E. & Stavins,Robert N. (ed.), 2009. "Post-Kyoto International Climate Policy," Cambridge Books, Cambridge University Press, number 9780521129527.
    45. Matthew O. Jackson & Brian W. Rogers, 2007. "Meeting Strangers and Friends of Friends: How Random Are Social Networks?," American Economic Review, American Economic Association, vol. 97(3), pages 890-915, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michael Jakob & Kai Lessmann, 2012. "Signaling in international environmental agreements: the case of early and delayed action," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 12(4), pages 309-325, November.
    2. Bård Harstad, 2018. "Pledge-and-Review Bargaining," CESifo Working Paper Series 7296, CESifo Group Munich.
    3. Rubio, Santiago J., 2018. "Self-Enforcing International Environmental Agreements: Adaptation and Complementarity," ETA: Economic Theory and Applications 276179, Fondazione Eni Enrico Mattei (FEEM).
    4. Robert Hahn & Robert Ritz, 2014. "Optimal Altruism in Public Good Provision," Cambridge Working Papers in Economics 1403, Faculty of Economics, University of Cambridge.
    5. repec:eee:eecrev:v:101:y:2018:i:c:p:418-440 is not listed on IDEAS
    6. Michael Jakob & Gunnar Luderer & Jan Steckel & Massimo Tavoni & Stephanie Monjon, 2012. "Time to act now? Assessing the costs of delaying climate measures and benefits of early action," Climatic Change, Springer, vol. 114(1), pages 79-99, September.
    7. Carsten Helm & Franz Wirl, 2016. "Climate Policies with Private Information: The Case for Unilateral Action," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(4), pages 893-916.
    8. Thomas Norman & Heinrich H. Nax, 2011. "Leading the Way: Coalitional Stability in Technological Cooperation & Sequential Climate Policy," Economics Series Working Papers 585, University of Oxford, Department of Economics.
    9. Christopher Costello & Bruno Nkuiya & Nicolas Querou, 2017. "Extracting spatial resources under possible regime shift," Working Papers hal-01615939, HAL.
    10. Charles F. Mason & Stephen Polasky & Nori Tarui, 2016. "Cooperation on Climate-Change Mitigation," CESifo Working Paper Series 5698, CESifo Group Munich.
    11. Hans Gersbach & Marie-Catherine Riekhof, 2017. "Technology Treaties and Climate Change," CER-ETH Economics working paper series 17/268, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    12. May Elsayyad & Florian Morath, 2016. "Technology Transfers For Climate Change," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57, pages 1057-1084, August.
    13. Olivier Bos & Béatrice Roussillon & Paul Schweinzer, 2013. "Agreeing on Efficient Emissions Reduction," CESifo Working Paper Series 4345, CESifo Group Munich.
    14. repec:eee:jeborg:v:157:y:2019:i:c:p:541-559 is not listed on IDEAS
    15. Blasch, Julia & Boogen, Nina & Filippini, Massimo & Kumar, Nilkanth, 2017. "Explaining electricity demand and the role of energy and investment literacy on end-use efficiency of Swiss households," Energy Economics, Elsevier, vol. 68(S1), pages 89-102.
    16. repec:bla:scandj:v:118:y:2016:i:4:p:785-815 is not listed on IDEAS
    17. repec:eee:eecrev:v:99:y:2017:i:c:p:43-55 is not listed on IDEAS
    18. Holtsmark, Katinka & Midttømme, Kristoffer, 2015. "The Dynamics of Linking Permit Markets," Memorandum 02/2015, Oslo University, Department of Economics.
    19. Olivier Bos & Béatrice Roussillon & Paul Schweinzer, 2016. "Agreeing on Efficient Emissions Reduction," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(4), pages 785-815, October.
    20. Katinka Kristine Holtsmark & Kristoffer Midttømme, 2019. "The dynamics of linking permit markets," CESifo Working Paper Series 7548, CESifo Group Munich.
    21. Miguel A. Meléndez-Jiménez & Arnold Polanski, 2018. "Dirty neighbors: Pollution in an interlinked world," Working Papers 2018-06, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
    22. Suzi Kerr & Adam Millard-Ball, 2012. "Cooperation To Reduce Developing Country Emissions," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 3(04), pages 1-30.
    23. Pichler, Paul & Sorger, Gerhard, 2018. "Delegating climate policy to a supranational authority: a theoretical assessment," European Economic Review, Elsevier, vol. 101(C), pages 418-440.
    24. repec:kap:enreec:v:73:y:2019:i:2:d:10.1007_s10640-018-0270-8 is not listed on IDEAS

    More about this item

    JEL classification:

    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jeurec:v:14:y:2016:i:3:p:719-752. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley Content Delivery). General contact details of provider: http://edirc.repec.org/data/eeaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.