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Self-Enforcing Agreements under Unequal Nationally Determined Contributions

Listed author(s):
  • Emilson C.D. Silva

For a large global economy with normal goods, and an unequal world income distribution, we consider the endogenous formation and stability of an international environmental agreement (IEA) under nationally determined contributions (NDCs). Nations share green R&D efforts and enjoy R&D spillovers if they join an IEA. Nonmembers do not enjoy R&D spillovers. We show that the Grand Coalition is stable under NDCs if all nations are active carbon abatement and R&D contributors. If some nations are inactive, because they lack sufficient income to provide carbon abatement and R&D, the stable coalition under NDCs is the coalition of all active (wealthier) nations.

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File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp5708.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 5708.

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Date of creation: 2016
Handle: RePEc:ces:ceswps:_5708
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