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Cooperation in Environmental Policy: A Spatial Approach

Ronald Davies () and Helen Naughton ()

University of Oregon Economics Department Working Papers from University of Oregon Economics Department

Abstract: Inefficient competition in emissions taxes creates benefits from international cooperation. In the presence of cross-border pollution, proximate (neighboring) countries may have greater incentives to cooperate than distant ones as illustrated by a model of tax competition for mobile capital. Spatial econometrics is used to estimate participation in 37 international environmental treaties. Data on 41 countries from 1980-1999 reveal evidence of increased cooperation among proximate countries. Furthermore, the results indicate that FDI usually increases treaty participation. We also find that both OECD and non-OECD countries respond positively to OECD countriesÂ’ participation but the response to non-OECD countries is primarily from similar countries. This suggests that the rich countries may lead others in setting environmental quality.

Keywords: Environmental agreements; foreign direct investment; spatial econometrics (search for similar items in EconPapers)
JEL-codes: F53 Q58 (search for similar items in EconPapers)
Date: 2003-04-10, Revised 2003-06-10
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Journal Article: Cooperation in environmental policy: a spatial approach (2014) Downloads
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