Signalling in International Environmental Agreements: Using Pre-Agreement Emission Level as a Signalling Device

U. Steiner

Working Papers from Aarhus School of Business - Department of Economics

Abstract: This paper addresses the question about strategic incentives in international environmental agreements and tries to give a positive description of how the design of the agreement influences the strategic behaviour of potential participants before they enter the treaty. A common feature of the design of agreements is that the reduction obligations (RO) are made contingent on a pre-agreement or baseline emission. As it is assumed that countries posses better information about their reduction costs than does the international body in charge of deciding the RO, countries might have incentivesto signal higher costs by increasing their baseline emission, and thereby reducing the costs of entering the agreement...

Keywords: GAME THEORY; INTERNATIONAL ECONOMY; ENVIRONMENT (search for similar items in EconPapers)
JEL-codes: C72 Q2 (search for similar items in EconPapers)
Date: 1997

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