IDEAS home Printed from https://ideas.repec.org/p/mpi/wpaper/tax-mpg-rps-2014-20.html
   My bibliography  Save this paper

Does a Clean Development Mechanism Facilitate International Environmental Agreements?

Author

Listed:
  • Kai A. Konrad
  • Marcel Thum

Abstract

When politicians negotiate in international climate conventions they may suffer from incomplete information about each other's preferences about reaching an agreement. As is known, this may cause failure to reach an efficient cooperative agreement. We study the role of the clean development mechanism (CDM) for the likelihood of such failure. The CDM has been introduced in the context of the Kyoto Protokol to allow countries to make efficiency enhancing use of cross-country low-cost mitigation opportunities. We use a simple bargaining framework to uncover why this mechanism may reduce the likelihood for reaching an efficient cooperative climate agreement.

Suggested Citation

  • Kai A. Konrad & Marcel Thum, 2014. "Does a Clean Development Mechanism Facilitate International Environmental Agreements?," Working Papers tax-mpg-rps-2014-20, Max Planck Institute for Tax Law and Public Finance.
  • Handle: RePEc:mpi:wpaper:tax-mpg-rps-2014-20
    as

    Download full text from publisher

    File URL: http://www.tax.mpg.de/RePEc/mpi/wpaper/TAX-MPG-RPS-2014-20.pdf
    File Function: Full text (original version)
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Pierre Courtois & Tarik Tazdaït, 2014. "Bargaining over a climate deal: deadline and delay," Annals of Operations Research, Springer, vol. 220(1), pages 205-221, September.
    2. David Martimort & Wilfried Sand-Zantman, 2013. "Solving the global warming problem: beyond markets, simple mechanisms may help!," Canadian Journal of Economics, Canadian Economics Association, vol. 46(2), pages 361-378, May.
    3. Lange, Andreas & Vogt, Carsten, 2003. "Cooperation in international environmental negotiations due to a preference for equity," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2049-2067, September.
    4. Beccherle, Julien & Tirole, Jean, 2011. "Regional initiatives and the cost of delaying binding climate change agreements," Journal of Public Economics, Elsevier, vol. 95(11), pages 1339-1348.
    5. Hoel, Michael, 1991. "Global environmental problems: The effects of unilateral actions taken by one country," Journal of Environmental Economics and Management, Elsevier, vol. 20(1), pages 55-70, January.
    6. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-894, Supplemen.
    7. A. Caparrós & J.-C. Péreau & T. Tazdaït, 2004. "North-South Climate Change Negotiations: A Sequential Game with Asymmetric Information," Public Choice, Springer, vol. 121(3), pages 455-480, February.
    8. Fuhai Hong, 2014. "Technology transfer with transboundary pollution: A signalling approach," Canadian Journal of Economics, Canadian Economics Association, vol. 47(3), pages 953-980, August.
    9. Michael Hoel & Kerstin Schneider, 1997. "Incentives to participate in an international environmental agreement," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 9(2), pages 153-170, March.
    10. Myerson, Roger B. & Satterthwaite, Mark A., 1983. "Efficient mechanisms for bilateral trading," Journal of Economic Theory, Elsevier, vol. 29(2), pages 265-281, April.
    11. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    12. Matthew McGinty, 2007. "International environmental agreements among asymmetric nations," Oxford Economic Papers, Oxford University Press, vol. 59(1), pages 45-62, January.
    13. Scott Barret, 1998. "On the Theory and Diplomacy of Environmental Treaty-Making," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 317-333, April.
    14. Helm, Carsten, 2003. "International emissions trading with endogenous allowance choices," Journal of Public Economics, Elsevier, vol. 87(12), pages 2737-2747, December.
    15. Kalyan Chatterjee & William Samuelson, 1983. "Bargaining under Incomplete Information," Operations Research, INFORMS, vol. 31(5), pages 835-851, October.
    16. Wolfgang Buchholz & Kai Konrad, 1994. "Global environmental problems and the strategic choice of technology," Journal of Economics, Springer, vol. 60(3), pages 299-321, October.
    17. Helm, Carsten & Wirl, Franz, 2014. "The principal–agent model with multilateral externalities: An application to climate agreements," Journal of Environmental Economics and Management, Elsevier, vol. 67(2), pages 141-154.
    18. 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.
    19. Barrett, Scott, 1997. "The strategy of trade sanctions in international environmental agreements," Resource and Energy Economics, Elsevier, vol. 19(4), pages 345-361, November.
    20. Kai A. Konrad & Marcel Thum, 2014. "Climate Policy Negotiations with Incomplete Information," Economica, London School of Economics and Political Science, vol. 81(322), pages 244-256, April.
    21. Bård Harstad, 2007. "Harmonization and Side Payments in Political Cooperation," American Economic Review, American Economic Association, vol. 97(3), pages 871-889, June.
    22. Anat R. Admati & Motty Perry, 1987. "Strategic Delay in Bargaining," Review of Economic Studies, Oxford University Press, vol. 54(3), pages 345-364.
    23. Barrett, Scott, 2001. "International cooperation for sale," European Economic Review, Elsevier, vol. 45(10), pages 1835-1850, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    clean development mechanism; international climate agreements; bargaining; incomplete information;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mpi:wpaper:tax-mpg-rps-2014-20. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hans Mueller). General contact details of provider: http://edirc.repec.org/data/mptaxde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.