A Mechanism Design Approach to Climate Agreements

David Martimort and Wilfried Sand-Zantman

No 682, IDEI Working Papers from Institut d'Économie Industrielle (IDEI), Toulouse

Abstract: We analyze environmental agreements in contexts with asymmetric information, voluntary participation by sovereign countries and possibly limited enforcement. Taking a mechanism design perspective, we study how countries can agree on effort levels and compensations to take into account multilateral externalities. We delineate conditions for efficient agreements and trace out possible inefficiencies to the conjectures that countries hold following disagreement. We show how optimal mechanisms admit simple approximations with attractive implementation properties. Finally, we also highlight how limits on commitment strongly hinder performances of optimal mechanisms.

JEL-codes: D82 (search for similar items in EconPapers)
Date: 2011-08, Revised 2013-04-30
New Economics Papers: this item is included in nep-cta, nep-ene, nep-env and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://idei.fr/sites/default/files/medias/doc/by/s ... rmMD-30April2013.pdf Full text (application/pdf)

Related works:
Working Paper: A Mechanism Design Approach to Climate Agreements (2013)
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:ide:wpaper:24929

Access Statistics for this paper

More papers in IDEI Working Papers from Institut d'Économie Industrielle (IDEI), Toulouse Contact information at EDIRC.
Bibliographic data for series maintained by ().