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Can International Environmental Cooperation Be Bought?

Author

Listed:
  • Fuentes Albero Cristina

    () (UNIVERSITY OF PENNSYLVANIA)

  • Rubio Jorge Santiago J.

    () (UNIVERSITY OF PENNSYLVANIA UNIVERSITY OF VALENCIA)

Abstract

In this working paper a two-stage game of international environmental agreement formation with asymmetric countries is analytically solved. The equilibrium of the game allows to determine the number of countries interested in signing the agreement. Two cases are studied. In the first case, the countries differ only in the abatement costs, and in the second case, in the environmental damages. In both cases, two different institutional settings, one without side payments and another with side payments, are considered. The results establish that the asymmetry assumption has no important effects on the scope of cooperation in comparison with the symmetric case if side payments are not used or the only difference among countries is given by the abatement costs. However, when the only difference is given by the environmental damages, the result is that the level of cooperation that can be bought through a self-financed side payment system increases with the degree of asymmetry.

Suggested Citation

  • Fuentes Albero Cristina & Rubio Jorge Santiago J., 2008. "Can International Environmental Cooperation Be Bought?," Working Papers 2010101, Fundacion BBVA / BBVA Foundation.
  • Handle: RePEc:fbb:wpaper:2010101
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    References listed on IDEAS

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    More about this item

    Keywords

    Self-enforcing international environmental agreements; linear environmental damages; public bad.;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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