Participation In International Environmental Agreements Research Articles

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

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.

Economic and political drivers of environmental impact shifting between countries

There is mounting evidence that major improvements in environmental quality in high-income countries over the past decades may have been achieved to a large degree through relocation of environmental impacts of consumption to other, usually poorer countries. While political and academic debates on appropriate policy interventions to address this challenge are gaining ground, we still know rather little about the drivers of international environmental impact shifting, other than international trade flows per se. We address this issue by focusing on the effects of economic inequality and political factors. We argue that income inequality between and within countries as well as variation in political institutions, environmental clauses in preferential trade agreements (PTAs), and participation in international environmental treaties could be important drivers or mitigators of environmental impact shifting between countries. We use novel panel data on five types of environmental impact flows between country dyads (187 countries, 1990–2015) to assess these arguments. We find that richer countries and countries with higher domestic economic equality tend to be the “outsourcers”, and poorer, domestically more unequal countries the “insourcers” of environmental impacts. Discrepancies in democracy levels aggravate the outsourcing from more equal to more unequal societies. In turn, environmental clauses in PTAs have a mitigating effect on environmental impact shifting, but participation in international environmental agreements has no such effect. Our findings highlight the need for green economy policies that reduce environmental footprints of consumption not only within high-income democracies, but also make their global supply chains more sustainable.

An empirical analysis of participation in international environmental agreements

This study investigates the determinants of participation in environmental agreements, with a special focus on lobbying and regional agreements. To this end, we collated the largest ratification dataset in the literature and identified all countries eligible for membership in each agreement. This feature allows to correct the identification bias associated with the misidentification of the risk set when regional agreements are included in the regression sample. We also improve the treatment of unobserved heterogeneity by using a multilevel survival approach and Markov Chain Monte Carlo (MCMC) estimator. Overall, we find that countries’ participation choices are interrelated and primarily driven by the agreements’ characteristics. Our findings indicate that regional agreements are two and half times more likely to be ratified than global agreements and that environmental lobbying positively affects participation in environmental agreements, while the effect of industrial lobbying is statistically insignificant. This result is robust to changes in specification and proxies used. Our results motivate several policy suggestions. We emphasise regional agreements’ capacity to deliver higher participation than global agreements and the importance of securing the early ratification of key players.

Participation and Duration of Environmental Agreements: Investment Lags Matter

This paper analyzes participation in international environmental agreements in a dynamic game in which countries pollute and invest in two types of clean technology that differ in investment lags. If investments are noncontractible, countries underinvest in the long-lag technology in the last period of the contract, which leads to a hold-up problem. Countries do not underinvest in the short-lag technology. If the short-lag technology is sufficiently cheap, the hold-up problem becomes irrelevant, and significant participation is not feasible. Our paper supplements Battaglini and Harstad, who point out that the hold-up problem may result in significant participation and even in the first-best outcome, and shows that the assumptions required for significant participation may be more limited than expected.

An adaptation-mitigation game: does adaptation promote participation in international environmental agreements?

This paper studies how the investment in adaptation can influence the participation in an international environmental agreement (IEA) when countries decide in adaptation before they choose emissions. Three types of agreements are studied, a mitigation agreement for which countries coordinate their decisions only on emissions; an adaptation agreement for which there is only coordination when countries decide their levels of adaptation and a complete agreement when there is coordination in both emissions and adaptation levels. In every case, we assume that the degree of effectiveness of adaptation is bounded from above, in order words, adaptation can alleviate the environmental problem, but it cannot solve it by itself leading the vulnerability of the country to almost zero. Our first results show that in our symmetric model where signatories select the same level of adaptation there are not signatory-signatory international externalities and the complete agreement coincides with the mitigation agreement, and moreover it does not matter when adaptation is chosen with respect to emissions. The main contribution of this paper is to show that the grand coalition could be stable for all types of agreement, but only for extremely high degrees of effectiveness of adaptation. If this condition is not satisfied, the model predicts low levels of membership. The standard result of three countries is found for the mitigation/complete agreement. For the adaptation agreement participation can be higher than three, but not higher than six countries. In any case, we can conclude that under reasonable values for the degree of effectiveness of adaptation, in our model adaptation does not promote participation in an IEA.

An Empirical Analysis of Participation in International Environmental Agreements

An Empirical Analysis of Participation in International Environmental Agreements

Voluntary Participation in International Environmental Agreements and Authority Structures in a Federation: A Note

We examine how a voluntary participation decision in international environmental negotiations affects the endogenous authority structure in a federation. In our model, the federal government of each country decides whether to delegate both the decision to participate in a negotiation that determines the abatement level of pollution (the level of the public good), and the negotiation itself, to a regional government of the polluter region. We show that there exists a subgame perfect equilibrium in which none of the federal governments chooses delegation, which is quite different from the authority structure in the absence of a voluntary participation decision. The main contribution is to explain why the federal government has an incentive not to delegate decisions to a regional government

An Adaptation-Mitigation Game: Does Adaptation Promote Participation in International Environmental Agreements?

This paper studies how the investment in adaptation can influence the participation in an international environmental agreement (IEA) when countries decide in adaptation before they choose their levels of emissions. Two types of agreements are studied, a complete agreement for which countries coordinate their decisions on adaptation and emissions, and an adaptation agreement for which there is only coordination when countries decide their levels of adaptation. In both cases, we assume that the degree of effectiveness of adaptation is bounded from above, in order words, adaptation can alleviate the environmental problem, but it cannot solve it by itself leading the vulnerability of the country to almost zero. Our results show that the grand coalition could be stable for both types of agreement, but for extremely high degrees of effectiveness of adaptation. If this condition is not satisfied, the model predicts low levels of membership. The standard result of three countries for the complete agreement. For the adaptation agreement participation can be higher than three, but not higher than six countries. In any case, we can conclude that under reasonable values for the degree of effectiveness of adaptation, in our model adaptation does not promote participation in an IEA.

Voluntary Participation in International Environmental Agreements and Authority Structures in a Federation

We examine how the voluntary participation decision in international environmental negotiations affects negotiation outcomes when every country is a federation. Each country consists of two autonomous regions: one is a polluter region and the other is a nonpolluter region. In the model, each country can freely decide whether to participate in a negotiation, which determines the abatement level of pollution (the level of public goods). The participation decision of a country and the negotiation (if the country decides to participate) are either conducted by the federal government of the country or are delegated to the regional government of the polluter region. We show that in combination with the voluntary participation decision, the endogenous choice of authority by the federal governments has a coordination-game property; that is, there are at least two equilibria and one equilibrium provides a higher welfare than the other.

Cooperative R&D investments and licensing breakthrough technologies: International environmental agreements with participation game

This study examines international environmental agreements (IEAs) with cooperative R&D, which can bring about a substantial reduction in greenhouse gas emissions. To achieve a large IEA size consisting of more than four countries, we propose a novel method of cooperative R&D investment and recovery and a licensing fee for the adoption of advanced technology, by applying the mechanism of a joiner’s gain function. The core findings of this study reveal that: (i) a large agreement can be achieved by considering R&D investment, R&D recovery, and a licensing fee; (ii) the diffusion process of advanced technology is clarified; (iii) non-investors’ adoption of an advanced abatement technology can be prevented by setting a licensing fee and instead, they participate and invest in R&D via agreement; (iv) a full participation state can be more easily sustained than any other number of participants. Our approach shows the diffusion process of advanced abatement technology after R&D. Consequently, this paper fills a research gap in cooperative R&D methods and the diffusion process of advanced technologies and provides a hopeful prospect for achieving full participation in IEAs and a large reduction in GHG emissions by way of cooperative R&D.

Does trade liberalization lead to environmental burden shifting in the global economy?

Does trade liberalization lead to the outsourcing of pollution from industrialized countries to developing countries? According to the pollution-haven hypothesis, international trade is a key channel through which richer countries can geographically dissociate consumption from production of goods. We examine whether and how trade liberalization via preferential trade agreements (PTAs) facilitates the shifting of consumption-based environmental burdens from developed countries (via imports) to poorer countries (via exports). Based on panel data analysis of 183 countries from 1987 to 2013 we find partial evidence for trade-induced environmental burden shifting. While we observe an increase in footprint exports from low-income countries when these countries liberalize trade, this is not matched by an increase in footprint imports of high-income countries. Our results also show that environmental clauses in PTAs and participation in international environmental agreements do not influence the relationship between trade liberalization and ecological footprint movements. However, domestic institutions have a significant effect on the trade-induced distribution of environmental burdens. These findings suggest that PTAs as a policy tool for trade liberalization are, per se, unlikely to induce exploitation of low-income countries' natural capital by wealthier nations. However, they suggest that political incentives inherent to democratic institutions encourage environmental burden shifting.

Reciprocal climate negotiators

Do reciprocal preferences matter for participation in international environmental agreements? Combining the two canonical models of Barrett (2003) and Rabin (1993), I find that 1) the empty coalition is always stable; 2) the grand coalition is stable if reciprocity preferences are sufficiently strong; 3) if a minority of countries are not reciprocal, a majority coalition can still be stable, if reciprocity is sufficiently strong and widespread; and 4) there is also a stable minority coalition, if costs are moderate and the number of countries is not too small. The latter coalition is weakly larger than the maximum stable coalition with standard preferences, but barely improves on welfare, and is characterized by negative sentiments. The analysis illustrates that although models of reciprocity tend to be complex, the context of a specific applied game may reduce this complexity.

Multiple Regional Agreements for Environmental Protection

Asheim et al. (2006, Journal of Environmental Economics and Management, vol.51, pp.93-109) show that participation in international environmental agreements (IEAs) can be doubled in a two-region world by the Regional Penance strategy, designating countries that are permitted to punish non-compliance, to sustain IEAs as weakly renegotiation-proof equilibrium. This study shows that broad participation and significant improvement in global welfare using IEAs can be achieved through a “multiple” regional coalition approach by modifying the Regional Penance strategy. As a result, this study succeeds in deriving the effectiveness of a regional cooperative approach for broad cooperation in the context of a repeated game framework.

A Weakly Renegotiation-Proof International Environmental Agreement with Altruism

This study provides a new framework for international environmental agreements (IEAs) with full participation if each country has altruistic preference, using a repeated game. We assume that each country has two types of altruism: impartial altruism, where each country cares about other countries’ net benefits from greenhouse gas abatement, and community altruism, where participation country concerns only to coalition partners. We show that a full participation with low degree of altruisms is feasible if considered in a repeated game framework with punishment scheme. Additionally, altruisms function as a complementary device of punishment scheme for IEA. Our main results show that altruism can facilitate full participation in IEA, suggesting that they should be considered in climate change negotiations.

International environmental agreements with ancillary benefits: Repeated games analysis

Both ancillary and primary benefits, generated by climate change mitigation, are indispensable key factors to implement the full participation in international environmental agreement (IEA). This paper presents a new IEA model with ancillary benefits, using a repeated game with the linear and quadratic emission abatement cost functions of each country. This study also investigates the effect of ancillary benefits on the condition for full participation in IEA. Ancillary benefits function as a complementary device of punishment scheme for IEA. Our main results show that ancillary benefits can facilitate full participation in IEA, thus suggesting that they should be considered in climate change negotiations.

Participation and Duration of Environmental Agreements

We analyze participation in international environmental agreements in a dynamic game in which countries pollute and invest in green technologies. If complete contracts are feasible, participants eliminate the holdup problem associated with their investments; however, most countries prefer to free ride rather than participate. If investments are noncontractible, countries face a holdup problem every time they negotiate; but the free-rider problem can be mitigated and significant participation is feasible. Participation becomes attractive because only large coalitions commit to long-term agreements that circumvent the holdup problem. Under well-specified conditions even the first-best outcome is possible when the contract is incomplete.

Endogenous Minimum Participation in International Environmental Agreements: An Experimental Analysis

Almost all international environmental treaties require a minimum number of countries to ratify the treaty before it enters into force. Despite the wide-spread use of this mechanism, little is known about its effectiveness at facilitating cooperation. We analyze an agreement formation game that includes an endogenously determined minimum participation constraint and then test the predictions using economic experiments. We demonstrate theoretically that players will vote to implement an efficient coalition size as the membership requirement and this coalition will form. Experimental tests of the theory demonstrate that the minimum participation mechanism is highly effective at facilitating cooperation when efficiency requires the participation of all players. However, when efficiency requires only a subset of players to participate, profitable coalitions are often deliberately blocked. In light of our results it is possible that equity concerns can impede the formation of international agreements when membership requirements allow free riders.

When do firms support environmental agreements?

Several firms have recently supported their countries’ participation in international environmental agreements where countries commit to stricter environmental regulation. This paper analyzes the rationale of this conduct by examining equilibrium emission standards with and without environmental treaties. We identify that more stringent environmental regulation produces two effects on firm profits: a negative effect due to larger abatement costs, and a positive effect that arises from the amelioration of duopoly overproduction. We describe under which conditions the positive effect dominates the negative effect, increasing firm profits, and inducing them to support their countries’ participation in environmental treaties.

Signed but Not Ratified: Limits to U.S. Participation in International Environmental Agreements

AbstractWhy does the United States sign environmental treaties but not ratify them? U.S. presidents have negotiated and signed several environmental treaties that ultimately could not obtain Senate ratification. This article considers two alternative explanations. First, presidents may face divided government and upcoming elections; elections can increase uncertainty regarding ratification, because they upset majorities and change congressional preferences on issues. Such factors may have caused “involuntary” defection from international environmental cooperation. Second, compensation and compromise on enabling legislation could satisfy enough senators and their constituents to allow the legislation's passage. Failure to secure ratification may be a result of the president's overestimating the potential for negotiating a policy package capable of creating sufficient support to obtain Senate ratification. I compare domestic constraints on U.S. participation in three international environmental negotiations—climate change, biodiversity, and chemicals—to assess the alternative explanations. The cases exemplify how domestic institutions affect international environmental cooperation.

The effects of tariffs on coalition formation in a dynamic global warming game

The prospects for cooperation on climate protection beyond 2012 are currently uncertain. Thus policy instruments which foster participation in International Environmental Agreements (IEA) are in demand. Among the instruments under discussion are trade sanctions. Multi-region optimal growth models are a state of the art tool for integrated assessment, but introducing trade sanctions distorts the competitive equilibrium, making it difficult to compute numerically. We introduce trade and trade sanctions into a model of coalition stability to assess the potential of trade sanctions to support an IEA. Trade is modeled by having all countries produce a generic output good, but adopting national product differentiation (Armington assumption). Coalitions are free to impose tariffs on imports from non-cooperating countries. We solve the model numerically using a refined version of Negishi's [Negishi, T., 1960. Welfare economics and existence of an equilibrium for a competitive economy. Metroeconomica 12, 92–97] basic algorithm. We then apply the model to analyze the influence of tariffs on international cooperation. The model suggests that there is indeed a significant potential to raise participation through trade sanctions, even when goods from different countries are nearly perfect substitutes. Furthermore we investigate the effect of trade sanctions on global welfare, environmental effectiveness, and the credibility of the tariff mechanism.