Self-enforcing international environmental agreements with third-party organizations: Initial payment, technological development, and refunding

Abstract

This paper presents a new framework for international environmental agreements (IEAs) with technological development that incorporates an initial payment and refunding scheme (IPRS) in collaboration with third-party organizations (TPOs). In our IPRS, technological development is achieved by using a portion of initial payments from signatories to the TPO, with the remaining amount being refunded to the payers if they cooperate with the IEA. We examine self-enforcing IEAs using a stage game model. The results show that IEA size increases with the cost of technological development. Consequently, we provide a solution that achieves large-scale self-enforcing IEAs in collaboration with TPOs while resolving issues regarding initial participation in IEAs.