International Environmental Agreements - The Impact of Heterogeneity among Countries on Stability

Effrosyni Diamantoudi, Eftichios Sartzetakis () and Stefania Strantza

No 274850, CSI: Climate and Sustainable Innovation from Fondazione Eni Enrico Mattei (FEEM)

Abstract: The present paper examines the stability of self-enforcing International Environmental Agreements (IEAs) among heterogeneous countries in a twostage emission game. In the first stage each country decides whether or not to join the agreement, while in the second stage the quantity of emissions is chosen simultaneously by all countries. We use quadratic benefit and environmental damage functions and assume k types of countries that differ in their sensitivity to the global pollutant. We find that the introduction of heterogeneity does not yield larger stable coalitions. In particular, we show that, in the case of two types, when stable coalitions exist their size is very small, and, if the asymmetry is strong enough, they include only one type of countries. Moreover, heterogeneity can reduce the scope of cooperation relative to the homogeneous case. We demonstrated that introducing asymmetry into a stable, under symmetry, agreement can disturb stability.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 34
Date: 2018-07-10
New Economics Papers: this item is included in nep-env and nep-gth
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Citations: View citations in EconPapers (2)

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https://ageconsearch.umn.edu/record/274850/files/NDL2018-022.pdf (application/pdf)

Related works:
Working Paper: International Environmental Agreements - The Impact of Heterogeneity among Countries on Stability (2018)
Working Paper: International Environmental Agreements - The Impact of Heterogeneity among Countries on Stability (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemci:274850

DOI: 10.22004/ag.econ.274850

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