Design of international environmental agreements under uncertainty

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

We present a simple game model of international environmental agreements and examine the effects of learning (resolution of uncertainty) on the stability of agreements. An agreement is said to be stable if no countries have an incentive to defect from it and free-ride. We have shown that whether negotiations are conducted before or after learning does not have a significant effect on the stability of an agreement, and that it is necessary to include “punishment” in the rules, which means that countries in a coalition should respond to countries defecting from the agreement by individually reducing the amount of their abatements to Nash equilibrium levels. Also shown is the fact that side payments are essential to realization of a stable imputation. It is important to include rules requiring technological and financial aid for abatement of anthropogenic pollutants.

Original languageEnglish
Pages (from-to)103-118
Number of pages16
JournalEnvironmental Economics and Policy Studies
Volume6
Issue number2
DOIs
Publication statusPublished - Jan 1 2004

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learning
defect
incentive
pollutant
effect
International environmental agreements
Abatement
Uncertainty
financial aid
Punishment
Financial aid
Side payments
Imputation
Nash equilibrium
Simple game
Defects
Incentives

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

Cite this

Design of international environmental agreements under uncertainty. / Fujita, Toshiyuki.

In: Environmental Economics and Policy Studies, Vol. 6, No. 2, 01.01.2004, p. 103-118.

Research output: Contribution to journalArticle

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