International Environmental Agreements Between Asymmetric Countries With Ancillary Benefits: A Long-Term Sustainability

Abstract

This research aims to relax the condition in which international environmental agreements consists of asymmetric countries are sustained for a long-term, considering a repeated game model and the effect of ancillary benefits. We suppose all countries have the feature of two-sided asymmetry: the public benefit, ancillary benefit and cost parameters are high or low, respectively. In repeated game model, participating countries’ actions are specified by strategy. In the strategy, we provide a new selection method of the punishing countries to act against any deviators from the agreement. As a result, by setting the different levels of punishment according to the type of deviating country, the conditions under which participants cooperate in accordance with the strategy can be relaxed. Additionally, it is revealed that our strategy is always effective if a minimum number of participating countries is satisfied before the agreement starts. With minimum participation clause, ancillary benefits effectively work as a complementary device of punishment scheme for IEA and can facilitate the feasibility of full participation IEA, thus suggesting that the effect of ancillary benefits is indispensable key factor at the negotiation table for prevention of climate change.