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An Infinite-Horizon Model of Dynamic Membership of International Environmental Agreements

Author

Listed:
  • Santiago Rubio

    (University of Valencia)

  • Alistair Ulph

    (University of Southampton)

Abstract

Much of the literature on international environmental agreements uses static models, although most important transboundary pollution problems involve stock pollutants. The few papers that study IEAs using models of stock pollutants do not allow for the possibility that membership of the IEA may change endogenously over time. In this paper we analyse a simple infinite-horizon version of the Barrett (1994) model, in which unit damage costs increase with the stock of pollution, and countries decide each period whether to join an IEA. We show that there exists a steady-state stock of pollution with corresponding steady-state IEA membership, and that if the initial stock of pollution is below (above) steady-state then membership of the IEA declines (rises) as the stock of pollution tends to steady-state. As we increase the parameter linking damage costs to the pollution stock, initial and steady-state membership decline; in the limit, membership is small and constant over time.

Suggested Citation

  • Santiago Rubio & Alistair Ulph, 2003. "An Infinite-Horizon Model of Dynamic Membership of International Environmental Agreements," Working Papers 2003.57, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2003.57
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    References listed on IDEAS

    as
    1. Michael Finus & Alejandro Caparrós (ed.), 2015. "Game Theory and International Environmental Cooperation," Books, Edward Elgar Publishing, number 15345.
    2. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-894, Supplemen.
    3. Marc Germain & Philippe Toint & Henry Tulkens & Aart Zeeuw, 2006. "Transfers to Sustain Dynamic Core-Theoretic Cooperation in International Stock Pollutant Control," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 251-274, Springer.
    4. Petrosjan, Leon & Zaccour, Georges, 2003. "Time-consistent Shapley value allocation of pollution cost reduction," Journal of Economic Dynamics and Control, Elsevier, vol. 27(3), pages 381-398, January.
    5. 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.
    6. Santiago J. Rubio, 2001. "International Cooperation In Pollution Control," Working Papers. Serie AD 2001-21, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    7. Parkash Chander & Henry Tulkens, 2006. "A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 176-193, Springer.
    8. Rubio, S. & Ulph, A., 2002. "A simple dynamic model of international environmental agreements with a stock pollutant," Discussion Paper Series In Economics And Econometrics 209, Economics Division, School of Social Sciences, University of Southampton.
    9. Karp, Larry S. & Sacheti, Sandeep, 1997. "Dynamics and Limited Cooperation In International Environmental Agreements," CUDARE Working Papers 6212, University of California, Berkeley, Department of Agricultural and Resource Economics.
    10. Santiago Rubio & Begoña Casino, 2005. "Self-enforcing international environmental agreements with a stock pollutant," Spanish Economic Review, Springer;Spanish Economic Association, vol. 7(2), pages 89-109, June.
    11. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October.
    12. Ulph, Alistair, 2002. "International environmental agreements with a stock pollutant, uncertainty and learning," Discussion Paper Series In Economics And Econometrics 207, Economics Division, School of Social Sciences, University of Southampton.
    13. Carraro,Carlo & Siniscalco,Domenico (ed.), 1997. "New Directions in the Economic Theory of the Environment," Cambridge Books, Cambridge University Press, number 9780521590891.
    14. Rubio, S. & Ulph, A., 2002. "A simple dynamic model of international environmental agreements with a stock pollutant," Discussion Paper Series In Economics And Econometrics 0209, Economics Division, School of Social Sciences, University of Southampton.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Self-enforcing international environmental agreements; Internal and external stability; Stock pollutant;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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