 Enforcement and cost-effectiveness of international environmental agreements: The role of side-paymentsNo 350, Discussion Papers, Series II from University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy" Abstract: The paper explores the prospects for international environmental cooperation in a context of limited enforcement, if we allow for side-payments between countries and sequential moves in the implementation of the agreement. The framework of the analysis is a static model of heterogenous countries formulated in terms of costs and benefits of emission abatements. Taking the noncooperative Nash equilibrium as starting-point for negotiations, a mechanism is analysed that uses self-financed transfers as an instrument to create and enforce an international environmental agreement. Two kinds of side-payments are considered: transfers that are self-financed but otherwise unrestricted, and transfers that are restricted to compensations for cost-effectiveness of abatements. Numerical simulations for the different scenarios considered illustrate the gains from cooperation that can be achieved with this mechanism. JEL-codes: D61 D62 H77 Q20 Q28 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:zbw:kondp2:350 Access Statistics for this paper More papers in Discussion Papers, Series II from University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy" Contact information at EDIRC. |
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