International Cooperation and Kantian Moral Behaviour – Complements or Substitutes?

Faced with a global emissions problem such as climate change we know that if countries' emissions decisions are made in an independent and self-interested fashion the outcome can be very far from optimal. One proposed solution is to have countries act more morally by co-operating and so taking account of the impact of their emissions decisions on the welfare of other countries. However, if the decision to co-operate is made in a self-interested fashion the standard non-cooperative model of IEAs yields the pessimistic conclusion that the more serious the environmental problem the smaller will be the equilibrium membership of an IEA. Our paper examines the implications for emissions, IEA membership and welfare of assuming that countries make both emissions and IEA membership decisions in the alternative moral fashion of acting as imperfect Kantians as defined by Alger and Weibull (2013). A similar approach has been taken in Eichner and Pethig (2022) who show that the grand coalition (and first-best) can be achieved when countries have a weight on Kantian behaviour greater than a critical value below 2/3. We argue that their approach to modelling the membership decision of imperfect Kantians is problematic and propose an alternative approach. We show that (i) for any weight attached to Kantian behaviour, the equilibrium level of IEA membership and resulting global welfare is higher using our model; (ii) consequently achieving the grand coalition and hence first-best does not require such a high weight on Kantian behaviour; (iii) acting cooperatively and in a Kantian fashion are complementary rather than substitute moral approaches to achieving the first best.