Sticks and Carrots for the Design of International Climate Agreements with Renegotiations

Hans-Peter Weikard and Rob Dellink

No 2008.26, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper examines stability of international climate agreements for carbon abatement under an optimal transfer rule and renegotiations. The optimal transfer rule suggested to stabilise international environmental agreements (Weikard 2005, Carraro, Eyckmans and Finus 2006) is no longer optimal when agreements are renegotiated. We determine the conditions for optimal self-enforcing sequences of agreements. If these conditions are met, then transfer payments can be arranged such that no country wants to change its membership status at any stage. In order to demonstrate the applicability of our condition we use the STACO model, a 12-regions global model, to assess the impact of welldesigned transfer rules on the stability of an international climate agreement. Although there are strong free-rider incentives, we find a stable grand coalition in the first commitment period in a game with one round of renegotiations.

Keywords: Stability of Coalitions; International Environmental Agreements; Partition Function Approach; Sharing Rules; Optimal Transfers; Renegotiations (search for similar items in EconPapers)
JEL-codes: C72 D62 H41 H77 (search for similar items in EconPapers)
Date: 2008-03
New Economics Papers: this item is included in nep-ene, nep-env and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://feem-media.s3.eu-central-1.amazonaws.com/w ... oads/NDL2008-026.pdf (application/pdf)

Related works:
Journal Article: Sticks and carrots for the design of international climate agreements with renegotiations (2014)
Working Paper: Sticks and Carrots for the Design of International Climate Agreements with Renegotiations (2008)
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:fem:femwpa:2008.26

Access Statistics for this paper

More papers in Working Papers from Fondazione Eni Enrico Mattei Contact information at EDIRC.
Bibliographic data for series maintained by Alberto Prina Cerai ( this e-mail address is bad, please contact ).