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International Environmental Agreements -The Role of Foresight

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  • Effrosyni Diamantoudi
  • Eftichios S. Sartzetakis

    () (Department of Economics, University of Aarhus, Denmark)

Abstract

We examine the formation of International Environmental Agreements (IEAs). We extend the existing literature by endogenizing the reaction of the IEA's members to a deviation by a member or a group of members. We assume that when a country contemplates exiting or joining an agreement, it takes into account the reactions of other countries ignited by its own actions. We identify conditions under which there always exists a unique set of farsighted stable IEAs. The new farsighted IEAs can be much larger than those some of the previous models supported but are not always Pareto efficient. We extend the analysis to allow for coordinated action, that is, groups of countries jointly exiting or entering the agreement and fully characterize the coalitionally farsighted stable IEAs.

Suggested Citation

  • Effrosyni Diamantoudi & Eftichios S. Sartzetakis, "undated". "International Environmental Agreements -The Role of Foresight," Economics Working Papers 2002-10, Department of Economics and Business Economics, Aarhus University.
  • Handle: RePEc:aah:aarhec:2002-10
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Hassan Benchekroun & Amrita Ray Chaudhuri, 2015. "Cleaner Technologies and the Stability of International Environmental Agreements," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(6), pages 887-915, December.
    3. de Zeeuw, Aart, 2008. "Dynamic effects on the stability of international environmental agreements," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 163-174, March.
    4. Santiago J. Rubio & Alistair Ulph, 2006. "Self-enforcing international environmental agreements revisited," Oxford Economic Papers, Oxford University Press, vol. 58(2), pages 233-263, April.
    5. Karp, Larry & Simon, Leo, 2013. "Participation games and international environmental agreements: A non-parametric model," Journal of Environmental Economics and Management, Elsevier, vol. 65(2), pages 326-344.
    6. de Zeeuw, A.J., 2008. "Dynamic effects on the stability of international environmental agreements," Other publications TiSEM 41f27f71-d6e6-463e-9b03-f, Tilburg University, School of Economics and Management.
    7. Karp, Larry & Zhao, Jinhua, 2007. "A Proposal to Reform the Kyoto Protocol: the Role of Escape Clauses and Foresight," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt5b10v2jr, Department of Agricultural & Resource Economics, UC Berkeley.
    8. Benchekroun, H. & Marrouch, W. & Ray Chaudhuri, A., 2011. "Adaptation Effectiveness and Free-Riding Incentives in International Environmental Agreements," Discussion Paper 2011-120, Tilburg University, Center for Economic Research.
    9. Dritan Osmani & Richard S J Tol, 2008. "A Short Note on Joint Welfare Maximization Assumption," The IUP Journal of Managerial Economics, IUP Publications, vol. 0(3), pages 22-39, August.
    10. Marta Biancardi & Andrea Di Liddo, 2008. "International Environmental Agreement: a Dynamic Model of Emissions Reduction," Quaderni DSEMS 13-2008, Dipartimento di Scienze Economiche, Matematiche e Statistiche, Universita' di Foggia.
    11. Dritan Osmani & Richard Tol, 2009. "Toward Farsightedly Stable International Environmental Agreements," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(3), pages 455-492, June.
    12. Hong, Fuhai & Karp, Larry, 2012. "International Environmental Agreements with mixed strategies and investment," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 685-697.
    13. 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.
    14. Marta Biancardi & Giovanni Villani, 2011. "Largest Consistent Set in International Environmental Agreements," Computational Economics, Springer;Society for Computational Economics, vol. 38(3), pages 407-423, October.
    15. Dritan Osmani & Richard S.J. Tol, 2007. "Toward Farsightedly Stable International Environmental Agreements, Part two," Working Papers FNU-149, Research unit Sustainability and Global Change, Hamburg University, revised Oct 2007.
    16. Dritan Osmani & Richard S.J. Tol, 2008. "Evolution in time of Farsightedly Stable Coalitions: An Application of FUND," Working Papers FNU-162, Research unit Sustainability and Global Change, Hamburg University, revised May 2008.
    17. Michèle Breton & Michel Keoula, 2012. "Farsightedness in a Coalitional Great Fish War," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(2), pages 297-315, February.
    18. Giovanni Villani & Marta Biancardi, 2011. "Largest Consistent Set in International Environmental Agreements," Quaderni DSEMS 04-2011, Dipartimento di Scienze Economiche, Matematiche e Statistiche, Universita' di Foggia.
    19. Ngo Van Long, 2014. "The Green Paradox in Open Economies," CESifo Working Paper Series 4639, CESifo Group Munich.

    More about this item

    Keywords

    International Environmental Agreements; Public good provision; Coalition formation; Foresight;

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other

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