Stable International Environmental Agreements: An Analytical Approach
In this paper we examine the formation of International Environmental Agreements (IEAs). We show that the welfare of the signatories does not increase monotonically with respect to the number of signatories. We provide an analytical solution of the leadership model. In particular, we find that the unique stable IEA consist of either two, three or four signatories if the number of countries is greater than 4. Furthermore, we show that the welfare of the signatories is almost at its lowest level when the IEA is stable. While in our model countries’ choice variable is emissions, we extend our results to the case where the choice variable is abatement efforts.
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|Date of revision:||Feb 2003|
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