Supporting Environmental Agreements under Asymmetry and Minimum Participation Rule
Year: 2024
Type: article
Abstract: This study analyzes the efficiency of external transfers in international environmental agreements (IEAs) with two types of heterogeneous countries differing in abatement benefit or abatement cost parameters. We introduce a minimum participation rule concerning the number of supporters, who commit to transfer welfare to induce all the other countries to form a self-enforcing IEA. The analytical result shows that an equilibrium exists where all countries except supporters become members of the agreement under a certain condition. The simulation results suggest that the higher the heterogeneity in the abatement benefit, the larger the IEA size and the higher the relative gains of IEAs; the degree of heterogeneity in the abatement cost has little impact on the IEA size but contributes to the relative gains of IEAs.
DOI: 10.1561/102.00000106
Authors: Li Qian, Fujita Toshiyuki, Zhang Yutian
Institutions: Nagoya University, Kyushu University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4404484424