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Dynamic Models for International Environmental Agreements

Author

Listed:
  • Michèle Breton

    (GERAD, CREF and HEC Montréal)

  • Lucia Sbragia

    (GERAD and HEC Montréal)

  • Georges Zaccour

    (GERAD and Chair in Game Theory & Management HEC Montréal)

Abstract

In this paper we develop a model to analyze, in a dynamic framework, how countries join international environmental agreements (IEAs). In the model, where countries suffer from the same environmental damage as a result of the total global emissions, a non-signatory country decides its emissions by maximizing its own welfare, whereas a signatory country decides its emissions by maximizing the aggregate welfare of all signatory countries. Signatory countries are assumed to be able to punish the non-signatories at a cost. When countries decide on their pollution emissions they account for the evolution of the pollution over time. Moreover, we propose a mechanism to describe how countries reach a stable IEA. The model is able to capture situations with partial cooperation in an IEA stable over time. It also captures situations where all countries participate in a stable agreement, or situations where no stable agreement is feasible. When more than one possibility coexists, the long-term outcome of the game depends on the initial conditions (i.e. the size of the initial group of signatory countries and the pollution level).

Suggested Citation

  • Michèle Breton & Lucia Sbragia & Georges Zaccour, 2008. "Dynamic Models for International Environmental Agreements," Working Papers 2008.33, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2008.33
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    File URL: https://www.feem.it/m/publications_pages/NDL2008-033.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    International Environmental Agreements; Non-Cooperative Dynamic Game; Coalition Stability;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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