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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. Henry Tulkens & Parkash Chander, 1997. "The Core of an Economy with Multilateral Environmental Externalities," International Journal of Game Theory, Springer;Game Theory Society, vol. 26(3), pages 379-401.
  2. Dirk Bergemann & Stephen Morris, 2009. "Robust Implementation in Direct Mechanisms," Levine's Working Paper Archive 814577000000000109, David K. Levine.
  3. CHANDER, Parkash & TULKENS, Henry, 2006. "Cooperation, stability and self-enforcement in international environmental agreements: a conceptual discussion," CORE Discussion Papers 2006003, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. Parkash Chander, 2007. "The gamma-core and coalition formation," International Journal of Game Theory, Springer;Game Theory Society, vol. 35(4), pages 539-556, April.
  5. Carlo Carraro & Carmen Marchiori & Sonia Oreffice, 2003. "Endogenous Minimum Participation in International Environmental Treaties," Working Papers 2003.113, Fondazione Eni Enrico Mattei.
  6. Bergemann, Dirk & Morris, Stephen, 2008. "Ex post implementation," Games and Economic Behavior, Elsevier, vol. 63(2), pages 527-566, July.
  7. Dirk Bergemann & Stephen Morris, 2003. "Robust Mechanism Design," Cowles Foundation Discussion Papers 1421, Cowles Foundation for Research in Economics, Yale University.
  8. Fuentes Albero Cristina & Rubio Jorge Santiago J., 2008. "Can International Environmental Cooperation Be Bought?," Working Papers 2010101, Fundacion BBVA / BBVA Foundation.
  9. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen.
  10. 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.
  11. Carsten Helm, 2001. "On the existence of a cooperative solution for a coalitional game with externalities," International Journal of Game Theory, Springer;Game Theory Society, vol. 30(1), pages 141-146.
  12. McQuillin, Ben, 2008. "The extended and generalized Shapley value: Simultaneous consideration of coalitional externalities and coalitional structure," MPRA Paper 12049, University Library of Munich, Germany.
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