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Are international environmental agreements stable ex-post?

  • Beard, Rodney
  • Mallawaarachchi, Thilak

In this paper we present a model of international environmental agreements in the presence of threshold effects. The model is in the tradition of models of international environmental agreements formulated as games in partition function form. Games in partition function form allow the incorporation of external effects between players. The model is applied to global climate change agreements. The agreement involves a contract between nations as to the level of abatement of greenhouse gas emissions and how these benefits are to be shared. Benefits to emissions abatement are subject to a threshold. Consequently, we model climate as a global threshold public good. This allows a mechanism to explore incentives and disincentives for signing agreements consequent to a critical number of other players committing to an agreement. We show that thresholds may destabilize what would be an otherwise stable agreement and that combining an emissions tax with an international agreement can be used to restore stability.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 34303.

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Date of creation: 25 Oct 2011
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Handle: RePEc:pra:mprapa:34303
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  1. Bergemann, Dirk & Stephen Morris, 2006. "Robust Implementation in Direct Mechanisms," Cowles Foundation Discussion Papers 1561RR, Cowles Foundation for Research in Economics, Yale University, revised Jan 2009.
  2. Carraro, Carlo & Siniscalco, Domenico, 1991. "Strategies for the International Protection of the Environment," CEPR Discussion Papers 568, C.E.P.R. Discussion Papers.
  3. Parkash CHANDER & Henry TULKENS, 2006. "Cooperation, Stability and Self-Enforcement in International Environmental Agreements: A Conceptual Discussion," SCAPE Policy Research Working Paper Series 0609, National University of Singapore, Department of Economics, SCAPE.
  4. Dirk Bergemann & Stephen Morris, 2003. "Robust Mechanism Design," Cowles Foundation Discussion Papers 1421R, Cowles Foundation for Research in Economics, Yale University, revised Apr 2004.
  5. Chander, Parkash & Tulkens, Henry, 1994. "The Core of an Economy With Multilateral Environmental Externalities," Working Papers 886, California Institute of Technology, Division of the Humanities and Social Sciences.
  6. CHANDER, Parkash, 2003. "The [gamma]-core and coalition formation," CORE Discussion Papers 2003046, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Carsten Helm, 2001. "On the existence of a cooperative solution for a coalitional game with externalities," International Journal of Game Theory, Springer, vol. 30(1), pages 141-146.
  8. McQuillin, Ben, 2009. "The extended and generalized Shapley value: Simultaneous consideration of coalitional externalities and coalitional structure," Journal of Economic Theory, Elsevier, vol. 144(2), pages 696-721, March.
  9. Carlo Carraro & Carmen Marchiori & Sonia Oreffice, 2003. "Endogenous Minimum Participation in International Environmental Treaties," Working Papers 2003.113, Fondazione Eni Enrico Mattei.
  10. Dirk Bergemann & Stephen Morris, 2005. "Ex Post Implementation," Cowles Foundation Discussion Papers 1502, Cowles Foundation for Research in Economics, Yale University.
  11. Fuentes Albero Cristina & Rubio Jorge Santiago J., 2008. "Can International Environmental Cooperation Be Bought?," Working Papers 2010101, Fundacion BBVA / BBVA Foundation.
  12. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen.
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