Coalition Formation and the Ancillary Benefits of Climate Policy

34 Pages Posted: 2 Sep 2008

See all articles by Michael Finus

Michael Finus

University of Stirling

Dirk T. G. Rübbelke

Technische Universität Bergakademie Freiberg

Date Written: August 27, 2008

Abstract

Several studies found ancillary benefits of environmental policy to be of considerable size. These additional private benefits imply not only higher cooperative but also noncooperative abatement targets. However, beyond these largely undisputed important quantitative effects, there are qualitative and strategic implications associated with ancillary benefits: climate policy is no longer a pure but an impure public good. In this paper, we investigate these implications in a setting of non-cooperative coalition formation. In particular, we address the following questions. 1) Do ancillary benefits increase participation in international environmental agreements? 2) Do ancillary benefits raise the success of these treaties in welfare terms?

Keywords: Ancillary Benefits, Climate Policy, Coalition Formation, Game Theory, Impure Public Goods

JEL Classification: C72, H87, Q54

Suggested Citation

Finus, Michael and Rübbelke, Dirk T. G., Coalition Formation and the Ancillary Benefits of Climate Policy (August 27, 2008). FEEM Working Paper No. 62.2008. Available at SSRN: https://ssrn.com/abstract=1259699 or http://dx.doi.org/10.2139/ssrn.1259699

Michael Finus (Contact Author)

University of Stirling ( email )

Stirling, Scotland FK9 4LA
United Kingdom

Dirk T. G. Rübbelke

Technische Universität Bergakademie Freiberg ( email )

Freiberg, 09599
Germany

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