International Environmental Agreement Formation and Trade

21 Pages Posted: 4 Sep 2009

See all articles by Xin Zhao

Xin Zhao

University of International Business and Economics (UIBE)

Baomin Dong

University of International Business and Economics (UIBE)

Date Written: September 3, 2009

Abstract

This paper examines self-enforcing International Environmental Agreements (IEAs) in an open economy environment. Using an extended model of Barrett (1994), we show that: (i) equilibrium tariff is positive; (ii) the endogenously determined size and the effectiveness of an multilateral IEA are the tradeoff of four effects, i.e., entry effect, level effect, leakage effect and tariff effect. The paper also offers an alternative explanation for the minimum participation clause adopted by most IEAs that is consistent with the mandate of an IEA.

Keywords: IEA, trade, leakage

JEL Classification: H41, Q20, F12

Suggested Citation

Zhao, Xin and Dong, Baomin, International Environmental Agreement Formation and Trade (September 3, 2009). Available at SSRN: https://ssrn.com/abstract=1467831 or http://dx.doi.org/10.2139/ssrn.1467831

Xin Zhao

University of International Business and Economics (UIBE) ( email )

10, Huixin Dongjie
Changyang District
Beijing, Beijing 100029
China

Baomin Dong (Contact Author)

University of International Business and Economics (UIBE) ( email )

10, Huixin Dongjie
Changyang District
Beijing, Beijing 100029
China

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