International Environmental Agreements with Asymmetric Countries: Climate Clubs vs. Global Cooperation

25 Pages Posted: 22 Jun 2015

See all articles by Achim Hagen

Achim Hagen

University of Oldenburg

Klaus Eisenack

University of Oldenburg

Date Written: June 22, 2015

Abstract

We investigate whether global cooperation for emission abatement can be improved if asymmetric countries can sign different parallel environmental agreements. The analysis assumes a two-stage game theoretical model. Conditions for self-enforcing sets of agreements and the resulting total emission abatement are determined. We allow for multiple coalitions with multiple types of asymmetric countries. We then analyze the effect of multiple coalitions for the case of increasing marginal costs of abatement as well as for decreasing marginal benefits of abatement more generally. The results are sensitive to the assumptions on the benefits from abatement. For constant marginal benefits, the possibility of multiple agreements increases the number of cooperating countries and total abatement (compared to the standard case with a single agreement). For decreasing marginal benefits, total emissions are independent of the number of admitted agreements. The paper thus contributes to the emerging discussion on the scope and limits of climate clubs.

Keywords: Multiple International Environmental Agreements, Coalition Formation

JEL Classification: Q54, C72

Suggested Citation

Hagen, Achim and Eisenack, Klaus, International Environmental Agreements with Asymmetric Countries: Climate Clubs vs. Global Cooperation (June 22, 2015). FEEM Working Paper No. 58.2015, Available at SSRN: https://ssrn.com/abstract=2621328 or http://dx.doi.org/10.2139/ssrn.2621328

Achim Hagen (Contact Author)

University of Oldenburg ( email )

Ammerländer Heerstraße 114-118
Oldenburg, D-26111
Germany

Klaus Eisenack

University of Oldenburg ( email )

Ammerländer Heerstraße 114-118
Oldenburg, D-26111
Germany

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