Self-enforcing international environmental agreements with third-party organizations: Initial payment, technological development, and refunding

Nobuyuki Takashima

Economics Letters, 2023, vol. 228, issue C

Abstract: This paper presents a new framework for international environmental agreements (IEAs) with technological development that incorporates an initial payment and refunding scheme (IPRS) in collaboration with third-party organizations (TPOs). In our IPRS, technological development is achieved by using a portion of initial payments from signatories to the TPO, with the remaining amount being refunded to the payers if they cooperate with the IEA. We examine self-enforcing IEAs using a stage game model. The results show that IEA size increases with the cost of technological development. Consequently, we provide a solution that achieves large-scale self-enforcing IEAs in collaboration with TPOs while resolving issues regarding initial participation in IEAs.

Keywords: International environmental agreements; Transboundary pollution; Self-enforcing; Third-party organizations; Initial payment and refunding (search for similar items in EconPapers)
JEL-codes: F53 H41 H87 Q52 Q54 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:228:y:2023:i:c:s0165176523001891

DOI: 10.1016/j.econlet.2023.111164

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