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International environmental agreements with ancillary benefits: Repeated games analysis

Nobuyuki Takashima

Economic Modelling, 2017, vol. 61, issue C, 312-320

Abstract: Both ancillary and primary benefits, generated by climate change mitigation, are indispensable key factors to implement the full participation in international environmental agreement (IEA). This paper presents a new IEA model with ancillary benefits, using a repeated game with the linear and quadratic emission abatement cost functions of each country. This study also investigates the effect of ancillary benefits on the condition for full participation in IEA. Ancillary benefits function as a complementary device of punishment scheme for IEA. Our main results show that ancillary benefits can facilitate full participation in IEA, thus suggesting that they should be considered in climate change negotiations.

Keywords: international environmental agreements; subgame perfect equilibrium; renegotiation-proof; repeated game; ancillary benefits (search for similar items in EconPapers)
JEL-codes: F53 H87 Q52 Q54 (search for similar items in EconPapers)
Date: 2017
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