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Strategic Delegation in the Formation of Modest International Environmental Agreements

Author

Listed:
  • Spycher, Sarah
  • Winkler, Ralph
Abstract
We reassess the well-known "narrow-but-deep" versus "broad-but-shallow" trade-off in international environmental agreements (IEAs), taking into account the principal-agent relationship induced by the hierarchical structure of international policy. To this end, we expand the modest coalition formation game, in which countries first decide on whether to join an agreement and then decide on emissions by a strategic delegation stage. In the weak delegation game, principals first decide whether to join an IEA, then delegate the domestic emission choices to an agent. Finally, agents in all countries decide on emissions. In countries not joining the IEA, agents choose emissions to maximize their own payoff, while agents of countries joining the IEA set emissions to internalize some exogenously given fraction of the externalities that own emissions cause on all members of the IEA. In the strong delegation game principals first delegate to agents, which then decide on membership and emissions. We find that strategic delegation crowds out all efforts to increase coalition sizes by less ambitious agreements in the weak delegation game, while in the strong delegation game the first-best from the principals' point of view can be achieved.

Suggested Citation

  • Spycher, Sarah & Winkler, Ralph, 2021. "Strategic Delegation in the Formation of Modest International Environmental Agreements," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242366, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc21:242366
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    References listed on IDEAS

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    Cited by:

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    3. Margherita Bellanca & Alessandro Spiganti, 2023. "Too Different To Get Along: Inequality and Global Public Goods," Working Papers 2023: 10, Department of Economics, University of Venice "Ca' Foscari".

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    More about this item

    Keywords

    international climate policy; coalition formation game; political economy; strategicdelegation; strategic voting;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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