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

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  • Andreas Lange

Abstract

This paper uses a coalition formation model to explore how equity considerations affect countries’ cooperation on global environmental issues, e.g. on climate change. When developing countries are exempted from obligations to reduce their emissions, I find that opening them for abatement projects financed by industrialized countries changes the incentives to cooperate in a way which can increase emissions and decrease welfare. Equity- concerns in industrialized countries regarding the difference between their per capita emission levels and those of developing countries lead to increased abatement but do not qualitatively change the incentives to cooperate. Inequality-aversion with respect to differences to abatement targets across industrialized countries generally induces larger coalition sizes and stricter abatement. Here, the inclusion of developing countries improves upon the prospects of cooperation. Copyright Springer 2006

Suggested Citation

  • Andreas Lange, 2006. "The Impact of Equity-preferences on the Stability of International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(2), pages 247-267, June.
    • Handle: RePEc:kap:enreec:v:34:y:2006:i:2:p:247-267
    DOI: 10.1007/s10640-005-0006-4
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    References listed on IDEAS

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    1. Böhringer, Christoph & Helm, Carsten, 2001. "Fair division with general equilibrium effects and international climate politics," ZEW Discussion Papers 01-67, ZEW - Leibniz Centre for European Economic Research.
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    1. Marco Grasso, 2004. "A Normative Framework of Justice in Climate Change," Working Papers 79, University of Milano-Bicocca, Department of Economics, revised Jul 2004.
    2. Lange, Andreas, 2004. "The Impact of Equity-preferences on the Stability of Heterogeneous International Agreements," ZEW Discussion Papers 04-50, ZEW - Leibniz Centre for European Economic Research.

    More about this item

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    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
    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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