An empirical test of new developments in coalition theory for the design of international environmental agreements

Abstract

ABSTRACT. We consider new developments in coalition theory for the design of international environmental agreements (IEAs). Applying an empirical model on climate change that comprises benefit and cost estimates from abatement for 12 world regions, we analyze how the design of an agreement affects the success of self-enforcing IEAs. We analyze single versus multiple coalitions, open versus exclusive membership with majority and unanimity voting, and no transfers versus transfers with four different transfer schemes.

Simulating a sequential coalition formation process for the climate change problem: first come, but second served?

“…Hence, if players have not only the option to join an agreement or to remain a singleton, coalition structures with multiple coalitions emerge in equilibrium. This observation is in line with simulation results for instance in Finus et al (2009) and Eyckmans and Finus (2006) and the theoretical findings in Carraro (2000) and Finus and Runsdhagen (2003), though they assume a simultaneous coalition formation process under various membership rules. The relative high average CGX is due to the fact that the FSMUG de facto implies that a coalition only forms if and only if all players unanimously agree to form exactly this coalition.…”

“…Moreover, if participation is not restricted exogenously to a single agreement, multiple coalitions will emerge as equilibrium outcomes. As argued for instance in Eyckmans and Finus (2006) and Finus et al (2009) T T T T T T F T T T T T 2.50 T T T T T T F T T T T T 2.50 …”

Game Theoretic Research on the Design of International Environmental Agreements: Insights, Critical Remarks, and Future Challenges

“…15 Moreover, 12 This model has been developed by Dellink et al (2004). The subsequent results are compiled from Finus et al (2004Finus et al ( , 2005Finus et al ( , 2006, Weikard et al (2006), andAltamirano-Cabrera et al (2008 Babiker et al (2001). 14 The bias introduced by this assumption is of minor importance as long as the decisions about membership is a one-shot decision and based on discounted payoffs.…”

The Tuvalu Syndrome

“…Others incorporate explicit political constraints into treaty design (Frankel 2008). Still others have moved away from the assumption of a single agreement with targets and timetables; Finus et al (2009) suggest that multiple agreements among countries with similar interests may be more effective than a single global agreement. Barrett (2006) calls for agreements that target research and development leading to breakthrough technologies, in the hopes of creating a self-enforcing IEA.…”