Self-enforcing international environmental agreements with a stock pollutant

  1. Rubio, Santiago
  2. Casino, Begoña
Journal:
Spanish economic review

ISSN: 1435-5469

Year of publication: 2005

Volume: 7

Issue: 2

Pages: 89-110

Type: Article

DOI: 10.1007/S10108-005-0098-6 DIALNET GOOGLE SCHOLAR

More publications in: Spanish economic review

Abstract

In this paper the stability of an International Environmental Agreement (IEA) among N identical countries that emit a pollutant are studied using a two-stage game. In the first stage each country decides noncooperatively whether or not to join an IEA, and in the second stage signatories jointly against nonsignatories determine their emissions in a dynamic setting defined in continuous time. A numerical simulation shows that a bilateral coalition is the unique self-enforcing IEA independently of the gains coming from cooperation and the kind of strategies played by the agents (open-loop or feedback strategies). We have also studied the effects of a minimum participation clause finding that for this case a self-enforcing IEA just consists of the number of countries established in the clause.

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