The Impact of Surplus Sharing on the Stability of International Climate Agreements

27 Pages Posted: 10 Sep 2004

See all articles by Hans-Peter Weikard

Hans-Peter Weikard

Wageningen UR - School of Social Sciences

Michael Finus

University of Stirling

Juan-Carlos Altamirano-Cabrera

Wageningen University - Social Sciences, Environmental Economics and Natural Resources Group

Multiple version iconThere are 2 versions of this paper

Date Written: June 2004

Abstract

This paper analyses stability of coalitions for greenhouse gas abatement for different sharing rules applied to the gains from co-operation. We use a 12-regions model designed to examine internal and external stability of coalitions (STACO). We compare different sharing rules like, for example, grandfathering (i.e. sharing proportional to emissions) and a number of so-called equitable rules like, for example, sharing proportional to population or according to historical responsibilities. Due to strong free-rider incentives we find only small stable coalitions for all sharing rules examined. As a general pattern we observe that coalitions consist of regions with low marginal abatement costs, which are attractive partners in any coalition, and regions which have the highest claims according to the respective sharing rule. Furthermore, we find that a grandfathering scheme leads to the largest and - in terms of greenhouse gas abatement - most successful coalition, while many of the equitable rules achieve very little.

Keywords: International environmental agreements, Sharing rules, Stability of coalitions

JEL Classification: D62, D63, Q25

Suggested Citation

Weikard, Hans-Peter and Finus, Michael and Altamirano-Cabrera, Juan-Carlos, The Impact of Surplus Sharing on the Stability of International Climate Agreements (June 2004). FEEM Working Paper No. 99.04. Available at SSRN: https://ssrn.com/abstract=563304 or http://dx.doi.org/10.2139/ssrn.563304

Hans-Peter Weikard (Contact Author)

Wageningen UR - School of Social Sciences ( email )

De Leeuwenborch
Hollandseweg 1
6706 KN Wageningen
Netherlands
+31 317 48 24 94 (Phone)
+31 317 48 49 33 (Fax)

Michael Finus

University of Stirling ( email )

Stirling, Scotland FK9 4LA
United Kingdom

Juan-Carlos Altamirano-Cabrera

Wageningen University - Social Sciences, Environmental Economics and Natural Resources Group ( email )

De Leeuwenborch
Hollandseweg 1
6706 KN Wageningen
Netherlands

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