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Title: Strategies for the International Protection of the Environment

Author(s): Carlo Carraro and Domenico Siniscalco

Publication Date: August 1991

Keyword(s): Coalitions, Environmental Agreements and Global Commons

Programme Area(s): Applied Macroeconomics

Abstract: This paper provides a general framework for studying the profitability and stability of international agreements to protect the environment in the presence of trans-frontier or global pollution. N countries are assumed to bargain on emission control. Each country decides whether or not to coordinate its strategy with other countries. A coalition is formed when both profitability and stability (no free riding) conditions are satisfied. The analysis shows that such coalitions exist but that only a small number of countries decide to cooperate. The paper thus explores the possibility of expanding such coalitions through transfers that induce other countries to cooperate. It is shown that large stable coalitions exist when low environmental interdependence exists and/or when the environmental damage functions are near-separable with respect to domestic and imported emissions. It is also shown that there are cases in which environmental negotiations can achieve substantial emission control even if countries behave non-cooperatively.

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Bibliographic Reference

Carraro, C and Siniscalco, D. 1991. 'Strategies for the International Protection of the Environment'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=568