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Political influence on non-cooperative international climate policy

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  • Wolfgang Habla
  • Ralph Winkler

Abstract

We analyze non-cooperative international climate policy in a setting of political competition by national interest groups. In the first stage, countries decide whether to set up an international emission permits market, which only forms if it is supported by all countries. In the second stage, countries non-cooperatively decide on the number of tradable or non-tradable emission allowances, depending on the type of regime. In both stages, special interest groups try to sway the government in their favor. We find that (i) both the choice of regime and the level of aggregate emissions only depend on the aggregate levels of organized stakes in all countries and not on their distribution among individual interest groups, and (ii) an increase in lobbying influence by a particular lobby group may backfire by inducing a change towards the less preferred regime.

Suggested Citation

  • Wolfgang Habla & Ralph Winkler, 2011. "Political influence on non-cooperative international climate policy," Diskussionsschriften dp1106, Universitaet Bern, Departement Volkswirtschaft.
  • Handle: RePEc:ube:dpvwib:dp1106
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Wolfgang Habla & Ralph Winkler, 2017. "Strategic Delegation and International Permit Markets: Why Linking May Fail," CESifo Working Paper Series 6515, CESifo Group Munich.
    2. Achim Hagen & Leonhard Kaehler & Klaus Eisenack, 2016. "Transnational Environmental Agreements with Heterogeneous Actors," Working Papers V-387-16, University of Oldenburg, Department of Economics, revised Jan 2016.
    3. Habla, Wolfgang & Winkler, Ralph, 2015. "Strategic Delegation and Non-cooperative International Permit Markets," Working Papers in Economics 636, University of Gothenburg, Department of Economics.
    4. Marchiori, Carmen & Dietz, Simon & Tavoni, Alessandro, 2017. "Domestic politics and the formation of international environmental agreements," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 115-131.
    5. Marchiori, Carmen & Dietz, Simon & Tavoni, Alessandro, 2017. "Domestic politics and the formation of international environmental agreements," LSE Research Online Documents on Economics 67923, London School of Economics and Political Science, LSE Library.
    6. Leszek Kąsek & Olga Kiuila & Krzysztof Wójtowicz & Tomasz Żylicz, 2012. "Economic effects of differentiated climate action," Working Papers 2012-12, Faculty of Economic Sciences, University of Warsaw.
    7. Olga Kiuila, 2013. "Regional economic effects of differentiated climate action," ERSA conference papers ersa13p334, European Regional Science Association.
    8. Geum Soo Kim, 2013. "Lobbies Competition and Bilateral International Environmental Agreements," Korean Economic Review, Korean Economic Association, vol. 29, pages 81-96.
    9. Grey, F., 2017. "Corporate lobbying for environmental protection," Cambridge Working Papers in Economics 1732, Faculty of Economics, University of Cambridge.

    More about this item

    Keywords

    non-cooperative climate policy; political economy; emissions trading; organization;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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