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Informational Benefits of International Environmental Agreements

Author

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  • Amihai Glazer

    () (Department of Economics, University of California-Irvine)

  • Stef Proost

    () (Center for Economic Studies, KULeuven)

Abstract

Given that it is difficult to monitor, and even more so to enforce, International Environmental Agreements, it is surprising that they are signed and implemented. This paper offers a theoretical model, which addresses the phenomena. The focus is on informational and coordination problems--a country which is unsure about the benefits of environmental policy may believe that the benefits are higher the greater the number of other countries which lean towards taking action. Whereas each country may individually take no environmental action, in equilibrium several countries may take environmental action if they expect others to. An International Environmental Agreement can thus be self-enforcing. Such effects can appear even if international environmental spillovers are absent, and even if monitoring and enforcement are infeasible. Our approach can explain additional phenomena: why a country that is known to care little about the environment may deeply influence other countries if it takes environmental action, why lags may appear between the signing of an agreement and its implementation, and how requirements for approval by several bodies within a country can increase support for environmental action.

Suggested Citation

  • Amihai Glazer & Stef Proost, 2008. "Informational Benefits of International Environmental Agreements," Working Papers 070810, University of California-Irvine, Department of Economics.
  • Handle: RePEc:irv:wpaper:070810
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    File URL: https://www.economics.uci.edu/files/docs/workingpapers/2007-08/glazer-10.pdf
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    References listed on IDEAS

    as
    1. Wolfgang Buchholz & Alexander Haupt & Wolfgang Peters, 2005. "International Environmental Agreements and Strategic Voting," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(1), pages 175-195, March.
    2. Robert Innes, 2006. "A Theory of Consumer Boycotts under Symmetric Information and Imperfect Competition," Economic Journal, Royal Economic Society, vol. 116(511), pages 355-381, April.
    3. Paul Klemperer, 1995. "Competition when Consumers have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade," Review of Economic Studies, Oxford University Press, vol. 62(4), pages 515-539.
    4. Parkash Chander & Henry Tulkens, 1995. "A core-theoretic solution for the design of cooperative agreements on transfrontier pollution," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 279-293, August.
    5. Murdoch, James C. & Sandler, Todd & Vijverberg, Wim P. M., 2003. "The participation decision versus the level of participation in an environmental treaty: a spatial probit analysis," Journal of Public Economics, Elsevier, vol. 87(2), pages 337-362, February.
    6. Andrei Shleifer, 2004. "Does Competition Destroy Ethical Behavior?," American Economic Review, American Economic Association, vol. 94(2), pages 414-418, May.
    7. Baron, David P., 2002. "Private Politics and Private Policy: A Theory of Boycotts," Research Papers 1766, Stanford University, Graduate School of Business.
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    Cited by:

    1. Kimiko Terai, 2012. "Financial Mechanism and Enforceability of International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 53(2), pages 297-308, October.
    2. Alexandre Sauquet, 2014. "Exploring the nature of inter-country interactions in the process of ratifying international environmental agreements: the case of the Kyoto Protocol," Public Choice, Springer, vol. 159(1), pages 141-158, April.

    More about this item

    Keywords

    Environmental policy; International agreements; Signaling; Regulation;

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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