Local and Global Pollution and International Environmental Agreements in a Network Approach

Michael Günther and Tim Hellmann

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: Increasing concerns about climate change have given rise to the formation of International Environmental Agreements (IEAs) as a possible solution to limit global pollution eff ects. In this paper, we study the stability of IEAs in a repeated game framework where we restrict to strategies which are simple and invariant to renegotiation. Our main contribution to the literature on IEAs is that we allow for heterogeneous patterns of pollution such that additional to a global eff ect of pollution there are local pollution e ffects represented by a network structure. We show that stable IEAs exist if the network structure is balanced. Too large asymmetries in the degree of local spillovers may however lead to non-existence of stable structures.

JEL-codes: C72 D85 Q50 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-ene, nep-env, nep-gth and nep-net
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Related works:
Working Paper: Local and Global Pollution and International Environmental Agreements in a Network Approach (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:112944

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