Working Paper: CEPR ID: DP5046
Authors: Carlo Carraro; Johan Eyckmans; Michael Finus
Abstract: The literature on international environmental agreements has recognized the role transfers play in encouraging participation in international environmental agreements (IEAs), but the few results achieved so far are overly specific and do not exploit the full potential of transfers for successful treaty-making. Therefore, in this paper, we develop a framework that enables us to study the role of transfers in a more systematic way. We propose a design for transfers using both internal and external financial resources and making 'welfare optimal agreements' self-enforcing. To illustrate the relevance of our transfer scheme for actual treaty-making, we use a well-known integrated assessment model of climate change to show how appropriate transfers may be able to induce almost all countries into signing a self-enforcing climate treaty.
Keywords: climate policy; international environmental agreements; self-enforcing international environmental agreements; transfers
JEL Codes: C72; H23; Q25; Q28
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| transfers (F16) | participation in self-enforcing climate treaties (F55) |
| transfers (F16) | asymmetric distribution of costs and benefits (D39) |
| transfers (F16) | internal stability of coalitions (D74) |
| optimal transfer schemes (F16) | internal stability of coalitions (D74) |
| optimal transfers (F16) | global welfare (I30) |
| optimal transfers (F16) | number of signatories in a coalition (C71) |
| transfers (F16) | mitigation of free-rider problems (H40) |
| design of transfer schemes (F16) | cooperation (P13) |