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Toward Farsightedly Stable International Environmental Agreements

Author

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  • Dritan Osmani
  • Richard S.J. Tol

    (Economic and Social Research Institute, Dublin, Ireland)

Abstract

The stability of International Environmental Agreements (IEA) is analyzed by using game theory. The integrated assessment model FUND provides the cost-bene¯t payo® functions of pollution abatement for sixteen di®erent world regions. The farsighted stability concept of Chwe (1994) is used and solved by combinatorial algorithms. The farsighted stability con- cept captures the perfect foresight of the players and predicts which coalitions can be formed when players are farsighted. All farsightedly stable coalitions are found as well as their im- provement to environment and welfare. The farsightedly stable coalitions are re¯ned further to the preferred farsightedly stable coalitions. The d'Aspremont stable coalitions are very shortly presented in order to compare with farsighted stable ones. The stability concept of d'Aspremont et al. (1983) assumes that players are myopic and consider only single-player movements.

Suggested Citation

  • Dritan Osmani & Richard S.J. Tol, 2007. "Toward Farsightedly Stable International Environmental Agreements," Working Papers FNU-140, Research unit Sustainability and Global Change, Hamburg University, revised Jul 2007.
    • Handle: RePEc:sgc:wpaper:140
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    References listed on IDEAS

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    Cited by:

    1. Benchekroun, H. & Marrouch, W. & Ray Chaudhuri, A., 2011. "Adaptation Effectiveness and Free-Riding Incentives in International Environmental Agreements," Discussion Paper 2011-120, Tilburg University, Center for Economic Research.
    2. Dritan Osmani & Richard S.J. Tol, 2008. "Evolution in time of Farsightedly Stable Coalitions: An Application of FUND," Working Papers FNU-162, Research unit Sustainability and Global Change, Hamburg University, revised May 2008.
    3. Karp, Larry & Simon, Leo, 2013. "Participation games and international environmental agreements: A non-parametric model," Journal of Environmental Economics and Management, Elsevier, vol. 65(2), pages 326-344.
    4. Hong, Fuhai & Karp, Larry, 2012. "International Environmental Agreements with mixed strategies and investment," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 685-697.
    5. Karp, Larry & Sakamoto, Hiroaki, 2021. "Sober optimism and the formation of international environmental agreements," Journal of Economic Theory, Elsevier, vol. 197(C).
    6. Ngo Van Long, 2014. "The Green Paradox in Open Economies," CESifo Working Paper Series 4639, CESifo.
    7. Richard S.J. Tol, 2013. "Long live the Kyoto Protocol!," Chapters, in: Roger Fouquet (ed.), Handbook on Energy and Climate Change, chapter 14, pages 344-351, Edward Elgar Publishing.
    8. Tom Dedeurwaerdere & Paolo Melindi-Ghidi & Willem Sas, 2015. "Voluntary Provision of Public Knowledge Goods: Group-Based Social Preferences and Coalition Formation," AMSE Working Papers 1545, Aix-Marseille School of Economics, France, revised 03 Nov 2015.
    9. Effrosyni Diamantoudi & Eftichios S. Sartzetakis & Stefania Strantza, 2023. "Climate Coalitions and their Persistent Ineffectiveness," Discussion Paper Series 2023_04, Department of Economics, University of Macedonia, revised Apr 2023.
    10. Baran Doda, Simon Quemin, Luca Taschini, 2017. "A theory of gains from trade in multilaterally linked ETSs," GRI Working Papers 275, Grantham Research Institute on Climate Change and the Environment.
    11. Dritan Osmani & Richard S J Tol, 2008. "A Short Note on Joint Welfare Maximization Assumption," The IUP Journal of Managerial Economics, IUP Publications, vol. 0(3), pages 22-39, August.
    12. Dritan Osmani & Richard S.J. Tol, 2007. "Toward Farsightedly Stable International Environmental Agreements, Part two," Working Papers FNU-149, Research unit Sustainability and Global Change, Hamburg University, revised Oct 2007.
    13. Birgit Bednar-Friedl, 2012. "Climate policy targets in emerging and industrialized economies: the influence of technological differences, environmental preferences and propensity to save," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(2), pages 191-215, May.
    14. Hassan Benchekroun & Amrita Ray Chaudhuri, 2015. "Cleaner Technologies and the Stability of International Environmental Agreements," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(6), pages 887-915, December.
    15. Michael Finus & Dirk Rübbelke, 2013. "Public Good Provision and Ancillary Benefits: The Case of Climate Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(2), pages 211-226, October.
    16. Barbot, Cristina & Betancor, Ofelia & Socorro, M. Pilar & Viecens, M. Fernanda, 2014. "Trade-offs between environmental regulation and market competition: Airlines, emission trading systems and entry deterrence," Transport Policy, Elsevier, vol. 33(C), pages 65-72.
    17. Bjart Holtsmark, 2013. "International cooperation on climate change: why is there so little progress?," Chapters, in: Roger Fouquet (ed.), Handbook on Energy and Climate Change, chapter 13, pages 327-343, Edward Elgar Publishing.
    18. Larry Karp & Hiroaki Sakamoto, 2018. "International environmental agreements without commitment," 2018 Meeting Papers 508, Society for Economic Dynamics.
    19. Alfred Endres & Bianca Rundshagen, 2013. "Incentives to Diffuse Advanced Abatement Technology Under the Formation of International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(2), pages 177-210, October.
    20. Dritan Osmani, "undated". "A note on optimal transfer schemes, stable coalition for environmental protection and joint maximization assumption," Working Papers FNU-176, Research unit Sustainability and Global Change, Hamburg University.
    21. David McEvoy & John Stranlund, 2009. "Self-enforcing International Environmental Agreements with Costly Monitoring for Compliance," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 42(4), pages 491-508, April.

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    More about this item

    Keywords

    game theory; integrated assessment modeling; farsighted stability; coalition formation; d'Aspremont stability;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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