[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/fem/femwpa/2004.68.html
   My bibliography  Save this paper

Modesty Pays: Sometimes!

Author

Listed:
  • Michael Finus

    (Department of Economics, University of Hagen)

Abstract
Standard non-cooperative game theoretical models of international environmental agreements (IEAs) draw a pessimistic picture of the prospective of successful cooperation: only small coalitions are stable that achieve only little. However, there also exist IEAs with higher participation and more success. In order to explain this phenomenon, this paper departs from the standard assumption of joint welfare maximization of coalition members, implying ambitious abatement targets and strong free-riding. Instead, it considers that countries agree on modest emission reduction targets. This may sufficiently raise participation so that the success of treaties improves in terms of global emission reduction and global welfare. Thus, modesty may pay, though the first best optimum cannot be achieved.

Suggested Citation

  • Michael Finus, 2004. "Modesty Pays: Sometimes!," Working Papers 2004.68, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2004.68
    as

    Download full text from publisher

    File URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2004-068.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Parkash Chander & Henry Tulkens, 2006. "The Core of an Economy with Multilateral Environmental Externalities," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 153-175, Springer.
    2. Endres, Alfred, 1997. "Negotiating a climate convention: The role of prices and quantities," International Review of Law and Economics, Elsevier, vol. 17(1), pages 147-156, March.
    3. Petrakis, Emmanuel & Xepapadeas, Anastasios, 1996. "Environmental consciousness and moral hazard in international agreements to protect the environment," Journal of Public Economics, Elsevier, vol. 60(1), pages 95-110, April.
    4. Michael Finus & Alejandro Caparrós (ed.), 2015. "Game Theory and International Environmental Cooperation," Books, Edward Elgar Publishing, number 15345.
    5. Böhringer, Christoph & Vogt, Carsten, 2002. "Dismantling of a breakthrough: the Kyoto Protocol - just symbolic policy!," ZEW Discussion Papers 02-25, ZEW - Leibniz Centre for European Economic Research.
    6. Murdoch, James C. & Sandler, Todd, 1997. "The voluntary provision of a pure public good: The case of reduced CFC emissions and the Montreal Protocol," Journal of Public Economics, Elsevier, vol. 63(3), pages 331-349, February.
    7. Michael Hoel & Kerstin Schneider, 1997. "Incentives to participate in an international environmental agreement," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 9(2), pages 153-170, March.
    8. Parkash Chander & Henry Tulkens, 2006. "A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 176-193, Springer.
    9. Christoph Böhringer & Michael Finus & Carsten Vogt (ed.), 2002. "Controlling Global Warming," Books, Edward Elgar Publishing, number 2535.
    10. Alfred Endres & Michael Finus, 2002. "Quotas May Beat Taxes in a Global Emission Game," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(6), pages 687-707, November.
    11. Michael Hoel, 1992. "International environment conventions: The case of uniform reductions of emissions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(2), pages 141-159, March.
    12. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October.
    13. Carlo Carraro & Carmen Marchiori & Sonia Oreffice, 2009. "Endogenous Minimum Participation in International Environmental Treaties," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 42(3), pages 411-425, March.
    14. Carlo Carraro & Carmen Marchiori, 2003. "Stable coalitions," Chapters, in: Carlo Carraro (ed.), The Endogenous Formation of Economic Coalitions, chapter 5, Edward Elgar Publishing.
    15. Nick Hanley & Henk Folmer (ed.), 1998. "Game Theory and the Environment," Books, Edward Elgar Publishing, number 1083.
    16. Carlo Carraro (ed.), 2003. "The Endogenous Formation of Economic Coalitions," Books, Edward Elgar Publishing, number 2999.
    17. Michael Finus & Bianca Rundshagen, 1998. "Renegotiation–Proof Equilibria in a Global Emission Game When Players Are Impatient," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(3), pages 275-306, October.
    18. Carraro, Carlo & Siniscalco, Domenico, 1995. "R&D Cooperation and the Stability of International Environmental Agreements," CEPR Discussion Papers 1154, C.E.P.R. Discussion Papers.
    19. Barrett, Scott, 1997. "The strategy of trade sanctions in international environmental agreements," Resource and Energy Economics, Elsevier, vol. 19(4), pages 345-361, November.
    20. Anastasios Xepapadeas (ed.), 1996. "Economic Policy for the Environment and Natural Resources," Books, Edward Elgar Publishing, number 1012.
    21. Finus, Michael & Rundshagen, Bianca, 1998. "Toward a Positive Theory of Coalition Formation and Endogenous Instrumental Choice in Global Pollution Control," Public Choice, Springer, vol. 96(1-2), pages 145-186, July.
    22. Henk Folmer & Pierre Mouche & Shannon Ragland, 1993. "Interconnected games and international environmental problems," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 3(4), pages 313-335, August.
    23. Scott Barrett, 1994. "The biodiversity supergame," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(1), pages 111-122, February.
    24. Michael Finus & Bianca Rundshagen, 2003. "Endogenous coalition formation in global pollution control: a partition function approach," Chapters, in: Carlo Carraro (ed.), The Endogenous Formation of Economic Coalitions, chapter 6, Edward Elgar Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arthur Caplan & Emilson Silva, 2007. "An equitable, efficient and implementable scheme to control global carbon dioxide emissions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 14(3), pages 263-279, June.
    2. Michèle Breton & Lucia Sbragia & Georges Zaccour, 2010. "A Dynamic Model for International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(1), pages 25-48, January.
    3. Dritan Osmani & Richard S.J. Tol, 2005. "The case of two self-enforcing international agreements for environmental protection," Working Papers FNU-82, Research unit Sustainability and Global Change, Hamburg University, revised May 2006.
    4. Juan‐Carlos Altamirano‐Cabrera & Michael Finus & Rob Dellink, 2008. "Do Abatement Quotas Lead To More Successful Climate Coalitions?," Manchester School, University of Manchester, vol. 76(1), pages 104-129, January.
    5. Michael Finus & Juan-Carlos Altamirano-Cabrera & Ekko Ierland, 2005. "The effect of membership rules and voting schemes on the success of international climate agreements," Public Choice, Springer, vol. 125(1), pages 95-127, July.
    6. Arthur Caplan, 2006. "A Comparison of Emission Taxes and Permit Markets for Controlling Correlated Externalities," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(4), pages 471-492, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michael Finus & Bianca Rundshagen, 2003. "How the Rules of Coalition Formation Affect Stability of International Environmental Agreements," Working Papers 2003.62, Fondazione Eni Enrico Mattei.
    2. Dritan Osmani & Richard S.J. Tol, 2005. "The case of two self-enforcing international agreements for environmental protection," Working Papers FNU-82, Research unit Sustainability and Global Change, Hamburg University, revised May 2006.
    3. Michael Finus & Stefan Maus, 2008. "Modesty May Pay!," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(5), pages 801-826, October.
    4. Michael Finus & Ekko Ierland & Rob Dellink, 2006. "Stability of Climate Coalitions in a Cartel Formation Game," Economics of Governance, Springer, vol. 7(3), pages 271-291, August.
    5. Johan Eyckmans & Michael Finus, 2006. "New roads to international environmental agreements: the case of global warming," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 7(4), pages 391-414, December.
    6. Marchiori, Carmen & Dietz, Simon & Tavoni, Alessandro, 2017. "Domestic politics and the formation of international environmental agreements," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 115-131.
    7. Michael Finus & Juan-Carlos Altamirano-Cabrera & Ekko Ierland, 2005. "The effect of membership rules and voting schemes on the success of international climate agreements," Public Choice, Springer, vol. 125(1), pages 95-127, July.
    8. Johan Eyckmans & Michael Finus, 2003. "Coalition Formation in a Global Warming Game: How the Design of Protocols Affects the Success of Environmental Treaty-Making," Energy, Transport and Environment Working Papers Series ete0317, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
    9. Carlo Carraro & Johan Eyckmans & Michael Finus, 2006. "Optimal transfers and participation decisions in international environmental agreements," The Review of International Organizations, Springer, vol. 1(4), pages 379-396, December.
    10. Carlo Carraro & Emanuele Massetti, 2010. "International Climate Change Negotiations: Lessons from Theory," Chapters, in: Emilio Cerdá Tena & Xavier Labandeira (ed.), Climate Change Policies, chapter 8, Edward Elgar Publishing.
    11. Dritan Osmani & Richard Tol, 2010. "The Case of two Self-Enforcing International Agreements for Environmental Protection with Asymmetric Countries," Computational Economics, Springer;Society for Computational Economics, vol. 36(2), pages 93-119, August.
    12. Valentina Bosetti & Carlo Carraro & Enrica De Cian & Romain Duval & Emanuele Massetti & Massimo Tavoni, 2009. "The Incentives to Participate in, and the Stability of, International Climate Coalitions: A Game-theoretic Analysis Using the Witch Model," Working Papers 2009.64, Fondazione Eni Enrico Mattei.
    13. Finus, Michael & Rundshagen, Bianca, 1998. "Toward a Positive Theory of Coalition Formation and Endogenous Instrumental Choice in Global Pollution Control," Public Choice, Springer, vol. 96(1-2), pages 145-186, July.
    14. Johan Eyckmans & Michael Finus, 2007. "Measures to enhance the success of global climate treaties," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 7(1), pages 73-97, March.
    15. Michael Finus & Bianca Rundshagen, 2005. "Participation in International Environmental Agreements: The Role of Timing and Regulation," Working Papers 2005.45, Fondazione Eni Enrico Mattei.
    16. Finus, Michael & Tjotta, Sigve, 2003. "The Oslo Protocol on sulfur reduction: the great leap forward?," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2031-2048, September.
    17. David M. McEvoy & John K. Stranlund, 2006. "Enforcing ‘Self-Enforcing’ International Environmental Agreements," Working Papers 2006-6, University of Massachusetts Amherst, Department of Resource Economics.
    18. Wood, Peter John, 2010. "Climate Change and Game Theory: a Mathematical Survey," Working Papers 249379, Australian National University, Centre for Climate Economics & Policy.
    19. Kai Lessmann & Robert Marschinski & Michael Finus & Ulrike Kornek & Ottmar Edenhofer, 2014. "Emissions Trading with Non-signatories in a Climate Agreement—an Analysis of Coalition Stability," Manchester School, University of Manchester, vol. 82, pages 82-109, December.
    20. Santiago J. Rubio & Alistair Ulph, 2006. "Self-enforcing international environmental agreements revisited," Oxford Economic Papers, Oxford University Press, vol. 58(2), pages 233-263, April.

    More about this item

    Keywords

    International environmental agreements; Internal&external stability; Modest emission reduction;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2004.68. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alberto Prina Cerai (email available below). General contact details of provider: https://edirc.repec.org/data/feemmit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.