Global Environmental Agreements and International Trade: Asymmetry of Countries Matters

Thomas Eichner and Rüdiger Pethig

Strategic Behavior and the Environment, 2018, vol. 7, issue 3-4, 281-316

Abstract: We investigate the formation of global climate agreements (stable grand climate coalitions) in a model, in which climate policy takes the form of carbon emission taxation and fossil fuel and consumption goods are traded on world markets. We expand the model of Eichner and Pethig (2015a) by considering countries that are identical within each of two groups but differ across groups with respect to climate damage or fossil fuel demand. Our numerical analysis suggests that climate damage asymmetry tends to discourage cooperation in the grand coalition. The effects of fuel-demand asymmetry depend on fossil fuel abundance. If fuel is very abundant, the grand coalition fails to be stable independent of the degree of fuel-demand asymmetry. If fuel is sufficiently scarce, low degrees of fuel-demand asymmetry discourage cooperation whereas higher degrees of asymmetry stabilize the grand coalition.

Keywords: Fuel demand; Climate damage; International trade; Asymmetry; Stability; Grand coalition (search for similar items in EconPapers)
JEL-codes: C72 F18 Q50 Q58 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://dx.doi.org/10.1561/102.00000085 (application/xml)

Related works:
Working Paper: Global Environmental Agreements and International Trade: Asymmetry of Countries Matters (2014)
Working Paper: Global environmental agreements and international trade: Asymmetry of countries matters (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:now:jnlsbe:102.00000085

Access Statistics for this article

More articles in Strategic Behavior and the Environment from now publishers
Bibliographic data for series maintained by Lucy Wiseman ().