Optimal Transfers and Participation Decisions in International Environmental Agreements
Fondazione Eni Enrico Mattei (FEEM); Ca Foscari University of Venice - Department of Economics; Centre for Economic Policy Research (CEPR); CMCC - Euro Mediterranean Centre for Climate Change (Climate Policy Division); IPCC Working Group III
Catholic University of Leuven (KUL) - Center for Economic Studies
University of Stirling
CEPR Discussion Paper No. 5046
The literature on international environmental agreements has recognized the role transfers play in encouraging participation in international environmental agreements (IEAs), but the few results achieved so far are overly specific and do not exploit the full potential of transfers for successful treaty-making. Therefore, in this paper, we develop a framework that enables us to study the role of transfers in a more systematic way. We propose a design for transfers using both internal and external financial resources and making 'welfare optimal agreements' self-enforcing. To illustrate the relevance of our transfer scheme for actual treaty-making, we use a well-known integrated assessment model of climate change to show how appropriate transfers may be able to induce almost all countries into signing a self-enforcing climate treaty.
Number of Pages in PDF File: 41
Keywords: Self-enforcing international environmental agreements, climate policy, transfers, international environmental agreements
JEL Classification: C72, H23, Q25, Q28working papers series
Date posted: September 15, 2005
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