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R&D Cooperation and the Stability of International Environmental Agreements

Author

Listed:
  • Carraro, Carlo
  • Siniscalco, Domenico

Abstract

International agreements to protect the global environment are typically difficult to reach. In principle they should be profitable for all players involved in the negotiation. Even when they are profitable, however, they are often unstable due to the incentive to free-ride (enjoying the clean environment provided by others' emission reduction without paying the cost). One possible way to overcome this problem is to link the unstable environmental agreement to other agreements which are profitable and stable. This paper presents a model where an environmental negotiation, which is profitable but unstable, is `stabilized' by linking it to an agreement on R&D cooperation, which is shown to be profitable and stable. The optimality of this linkage is also discussed.

Suggested Citation

  • Carraro, Carlo & Siniscalco, Domenico, 1995. "R&D Cooperation and the Stability of International Environmental Agreements," CEPR Discussion Papers 1154, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:1154
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    Citations

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    Cited by:

    1. Scott Barret, 1998. "On the Theory and Diplomacy of Environmental Treaty-Making," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 317-333, April.
    2. Barbara Buchner & Carlo Carraro & Igor Cersosimo & Carmen Marchiori, 2002. "Back to Kyoto? US Participation and the Linkage between R&D and Climate Cooperation," CESifo Working Paper Series 688, CESifo.
    3. Andrew K. Rose & Mark M. Spiegel, 2009. "Noneconomic Engagement and International Exchange: The Case of Environmental Treaties," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(2‐3), pages 337-363, March.
    4. Valentina Bosetti & Melanie Heugues & Alessandro Tavoni, 2017. "Luring others into climate action: coalition formation games with threshold and spillover effects," Oxford Economic Papers, Oxford University Press, vol. 69(2), pages 410-431.
    5. David M. McEvoy & John K. Stranlund, 2006. "Enforcing ‘Self-Enforcing’ International Environmental Agreements," Working Papers 2006-6, University of Massachusetts Amherst, Department of Resource Economics.
    6. Spagnolo, G., 1999. "Issue Linkage, Delegation, and International Policy Cooperation," Cambridge Working Papers in Economics 9913, Faculty of Economics, University of Cambridge.
    7. Sgobbi, Alessandra & Carraro, Carlo, 2011. "A Stochastic Multiple Players Multi-Issues Bargaining Model for the Piave River Basin," Strategic Behavior and the Environment, now publishers, vol. 1(2), pages 119-150, April.
    8. Claudia Kemfert & Wietze Lise & Richard Tol, 2004. "Games of Climate Change with International Trade," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 28(2), pages 209-232, June.
    9. Johannes Urpelainen, 2014. "Sinking costs to increase participation: technology deployment agreements enhance climate cooperation," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 16(3), pages 229-240, July.
    10. Carlo Carraro & Carmen Marchiori & Alessandra Sgobbi, 2005. "Advances in Negotiation Theory: Bargaining, Coalitions and Fairness," Working Papers 2005.66, Fondazione Eni Enrico Mattei.
    11. Michael Finus, 2004. "Modesty Pays: Sometimes!," Working Papers 2004.68, Fondazione Eni Enrico Mattei.
    12. S. Yu & E. C. Ierland & H.-P. Weikard & X. Zhu, 2017. "Nash bargaining solutions for international climate agreements under different sets of bargaining weights," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(5), pages 709-729, October.
    13. Scott Barrett & Robert Stavins, 2003. "Increasing Participation and Compliance in International Climate Change Agreements," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 3(4), pages 349-376, December.
    14. Carraro, Carlo & Sgobbi, Alessandra, 2007. "Modelling Negotiated Decision Making: A Multilateral, Multiple Issues, Non-Cooperative Bargaining Model with Uncertainty," CEPR Discussion Papers 6424, C.E.P.R. Discussion Papers.
    15. Michael Finus & Bianca Rundshagen, 1998. "Renegotiation–Proof Equilibria in a Global Emission Game When Players Are Impatient," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(3), pages 275-306, October.
    16. Finus, Michael & Rundshagen, Bianca, 1998. "Toward a Positive Theory of Coalition Formation and Endogenous Instrumental Choice in Global Pollution Control," Public Choice, Springer, vol. 96(1-2), pages 145-186, July.
    17. Johannes Urpelainen, 2013. "Can strategic technology development improve climate cooperation? A game-theoretic analysis," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 18(6), pages 785-800, August.

    More about this item

    Keywords

    Coalition; Environment; Global Warming; Innovation; Negotiations;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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