Stable International Environmental Agreements: An Analytical Approach

29 Pages Posted: 26 Nov 2001

See all articles by Effrosyni Diamantoudi

Effrosyni Diamantoudi

Concordia University, Quebec - Department of Economics

Eftichios S. Sartzetakis

University of Macedonia - Accounting and Finance

Date Written: January 2002

Abstract

In this paper we examine the formation of International Environmental Agreements (IEAs). We provide an analytical treatment of the main model used in the literature and offer a formal solution of it (which has not been available so far), while we clarify some misconceptions that exist in the literature. We find that the unique stable IEAs consist of either two, three or four signatories if the number of countries is greater than or equal to 5. Furthermore, we show that the welfare of the signatories of a stable IEA is very close to its lowest level vs the welfare of signatories of other non-stable IEAs. While in our model countries' choice variable is emissions, we extend our results to the case where the choice variable is abatement efforts.

JEL Classification: C79, D43, D49, L13

Suggested Citation

Diamantoudi, Effrosyni (Faye) and Sartzetakis, Eftichios S., Stable International Environmental Agreements: An Analytical Approach (January 2002). Available at SSRN: https://ssrn.com/abstract=291966 or http://dx.doi.org/10.2139/ssrn.291966

Effrosyni (Faye) Diamantoudi

Concordia University, Quebec - Department of Economics ( email )

1455 de Maisonneuve Blvd. W.
Montreal, Quebec H3G 1MB
Canada

Eftichios S. Sartzetakis (Contact Author)

University of Macedonia - Accounting and Finance ( email )

156 Egnatia Str.
Thessaloniki, 54006
Greece

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