International environmental agreements among asymmetric nations
This paper generalizes the benchmark model of self-enforcing international environmental agreements (IEAs) by allowing for all possible coalitions of n asymmetric nations. Asymmetries introduce gains from trade in pollution permits, reducing the incentive to deviate from a properly designed agreement. Coalitions are stable when the aggregate payoff to members is greater than the sum of individual payoffs from leaving the coalition. A benefit-cost ratio rule is proposed which distributes any remaining surplus after each coalition member receives their payoff as a non-signatory. Simulations of 20 asymmetric nations illustrate that even when the gains to cooperation are large, IEAs can achieve substantial emissions reductions. For example, when the benefit-cost ratio is one, stable coalitions can result in 47% of the difference between the full and no cooperation outcomes, compared with 5% for symmetric nations. Furthermore, 72% of the global payoff difference is obtained, relative to 9% for symmetry. Copyright 2007, Oxford University Press.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 59 (2007)
Issue (Month): 1 (January)
|Contact details of provider:|| Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK|
Fax: 01865 267 985
Web page: http://oep.oupjournals.org/
|Order Information:||Web: http://www.oup.co.uk/journals|
When requesting a correction, please mention this item's handle: RePEc:oup:oxecpp:v:59:y:2007:i:1:p:45-62. 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: (Oxford University Press)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.