Self-Enforcing International Environmental Agreements Revisited

Posted: 29 Feb 2008

See all articles by Santiago J. Rubio

Santiago J. Rubio

University of Valencia - Department of Economic Analysis

Alistair Ulph

University of Manchester - Faculty of Humanities

Abstract

Barrett's (1994) paper on transboundary pollution abatement shows that if the signatories of an international environmental agreement act in a Stackelberg fashion, then, depending on parameter values, a self-enforcing IEA can have any number of signatories between two and the grand coalition. Barrett obtains this result using numerical simulations in a pollution abatement model where he is not constraining emissions to be non-negative. Recent attempts to use analytical approaches and to explicitly recognize the non-negativity constraints have suggested that the number of signatories of a stable IEA may be very small. The way such papers have dealt with non-negativity constraints is to restrict parameter values to ensure interior solutions for emissions. We argue that a more appropriate approach is to use Kuhn-Tucker conditions to derive the equilibrium of the emissions game. When this is done we show, analytically, that the key results from Barrett's paper are maintained. Finally, we explain why his main conclusion is correct although his analysis can implicitly imply negative emissions.

JEL Classification: C72, D62, F02, Q20

Suggested Citation

Rubio Jorge, Santiago J. and Ulph, Alistair M., Self-Enforcing International Environmental Agreements Revisited. Oxford Economic Papers, Vol. 58, No. 2, pp. 233-263, 2006. Available at SSRN: https://ssrn.com/abstract=916866

Santiago J. Rubio Jorge

University of Valencia - Department of Economic Analysis ( email )

Avda. de los Naranjos s/n
46022 Valencia
Spain
+34963828219 (Phone)
+34963828249 (Fax)

Alistair M. Ulph (Contact Author)

University of Manchester - Faculty of Humanities ( email )

Manchester, M13 9PL
United Kingdom

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