Informational benefits of international environmental agreements

Amihai Glazer and Stef Proost

Center for Economic Studies - Discussion papers from Katholieke Universiteit Leuven, Centrum voor Economische Studiën

Abstract: Given the difficulty of monitoring, and even more so of enforcing, International Environmental Agreements, it is surprising that they are signed and implemented. This paper offers a theoretical model, which addresses this issue. The focus is on informational and coordination problems. A country which is unsure about the benefits of environmental policy may find that the benefits are higher the greater the number of other countries which lean towards taking action. Whereas each country may individually take weak environmental action, in equilibrium several countries may take strong action if they expect others to. An International Environmental Agreement can thus be selfenforcing. Such effects can appear even if international environmental spillovers are absent, and even if monitoring and enforcement are infeasible. Our approach can explain additional phenomena: why a country known to care little about the environment may deeply influence other countries if it takes strong environmental action, why lags may appear between the signing of an agreement and its implementation, and how requirements for approval by several bodies within a country can increase support for environmental action.

Keywords: Environmental policy; international agreements; signaling; regulation (search for similar items in EconPapers)
JEL-codes: Q58 D82 L51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-env and nep-reg
Date: 2008-05

Downloads: (external link)
http://www.econ.kuleuven.be/eng/ew/discussionpapers/Dps08/Dps0814.pdf

Related works:
Working Paper: Informational Benefits of International Environmental Agreements (2008)
Working Paper: Informational Benefits of International Environmental Agreements (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:ete:ceswps:ces0814

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