Self-enforcing environmental agreements and capital mobility

Eichner, Thomas; Pethig, Rüdiger

doi:10.1016/j.regsciurbeco.2014.06.002

Cited by 7 publications

(5 citation statements)

References 21 publications

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“…However, the outcomes in terms of emission reductions are disappointing. Eichner and Pethig (2014), on the other hand, show that in general the pessimistic results regarding the small size of the stable IEA still hold; however, for a particular set of parameter values, the Grand Coalition is stable. This implies that the social optimum is implementable within the particular set of parameter values.…”

Section: Introductionmentioning

confidence: 90%

“…They show that the stable IEAs may be larger in such cases, and the stable IEA may include the Grand Coalition. McGinty (2007), Biancardi and Villani (2010), Fuentes-Albero and Rubio (2010), Osmani and Tol (2010) and Pavlova and de Zeeuw (2013) Eichner and Pethig (2013) and Eichner and Pethig (2014) consider selfenforcing IEAs in the presence of international trade and capital mobility, respectively. Their frameworks deviate from most of the early papers in that they examine self-enforcing IEAs within general-equilibrium models.…”

Section: Introductionmentioning

confidence: 99%

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Self-enforcing agreements under unequal nationally determined contributions

Silva

2017

Int Tax Public Finance

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Section: Introductionmentioning

confidence: 90%

Section: Introductionmentioning

confidence: 99%

Self-enforcing agreements under unequal nationally determined contributions

Silva

2017

Int Tax Public Finance

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“…That is, these papers do not model free trade as a club good, rather the focus is on comparing autarky to the case where free trade across countries is exogenously given. For example, Eichner and Pethig (2014a) propose an IEA model in the presence of capital mobility across countries to examine the pollution haven effect. As long as the pollution is not too damaging, emissions taxes are strategic substitutes across countries and result in small stable IEAs.…”

Section: Iea Games In An Open Economy Contextmentioning

confidence: 99%

International Environmental Agreements: Doomed to Fail or Destined to Succeed? A Review of the Literature

Marrouch

Chaudhuri

2016

IRERE

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We survey the economics literature on International Environmental Agreements (IEAs). We classify the extant literature into the following categories: pure IEA games without linkages, which focus on a single externality stemming from global pollution; IEA games with side payments and issue linkages, which consider carrot or stick mechanisms to lure cooperators or punish defectors; political economy models, which examine intra-and intergovernmental issues that affect international negotiations; design issues of IEAs; behavioral factors, which affect the willingness of countries to cooperate; and additional externalities resulting from open economy issues and adaptation, which interact with the global pollution externality and affect the free-riding incentives of countries. Based on this classification of the literature, we attempt to identify conditions under which an * We would like to thank Rita Antar for her excellent research assistance. We appreciate insightful comments by two anonymous reviewers and the editors.

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“…Ogawa and Wildasin (2009) is also extended to analyze other important environmental issues. For example,Eichner and Pethig (2014) use the model ofEichner and Runkel (2012), which is an extension ofOgawa and Wildasin (2009), to analyze self-enforcing environmental agreements under tax competition.…”

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confidence: 99%

Transboundary pollution, tax competition and the efficiency of uncoordinated environmental regulation

Yamagishi

2019

Canadian J of Economics

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Under capital tax competition, surprisingly, Ogawa and Wildasin (2009) find that uncoordinated policymaking leads to a first-best outcome even in the presence of transboundary pollution. However, I show that if the level of environmental regulation is endogenized, the regulation level becomes too loose compared with the optimum ("race to the bottom"). Thus, despite the efficiency result of Ogawa and Wildasin (2009), efforts to achieve international environmental policy coordination are needed. I then examine the dependence of this result on the level of decisive voter's capital endowment. The regulation is inefficiently loose in many cases, but it can be too strict if the decisive voter's capital endowment is above the average. Thus, the possibility of "race to the top" cannot be eliminated. The inefficiency result does not generally depend on the timing of policymaking, although the efficiency may be restored in the limit case where the decisive voter has no capital at all.Résumé. Pollution transfrontalière, compétition fiscale et efficacité des politiques environnementales non coordonnées. En matière de compétition fiscale sur le capital, Ogawa et Wildasin (2009) ont découvert de manière surprenante que l'élaboration de politiques non coordonnées génère de meilleurs résultats, même en présence de pollution transfrontalière. Néanmoins, l'auteur montre que si le niveau de réglementation environnementale est endogénéisé, ce dernier devient trop laxiste (« nivellement par le bas » ) et s'écarte de l'idéal. Par conséquent, malgré les résultats d'efficacité d'Ogawa et Wildasin (2009), des efforts sont nécessaires pour parvenir à des politiques environnementales coordonnées sur le plan international. L'auteur examine ensuite la dépendance de ce résultat relativement au niveau de dotation en capital de l'électeur décisif. Dans de nombreux cas, la réglementation est inefficace et laxiste mais peut s'avérer trop stricte si la dotation en capital de l'électeur décisif est au-dessus de la moyenne. Ainsi, la possibilité d'un « nivellement par le haut » ne peut être écartée. Les résultats d'inefficacité ne dépendent généralement pas du calendrier d'élaboration des politiques, bien que l'efficacité peut être restaurée dans le cas restreint où l'électeur décisif ne possède aucun capital.

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Self-enforcing environmental agreements and capital mobility

Cited by 7 publications

References 21 publications

Self-enforcing agreements under unequal nationally determined contributions

Self-enforcing agreements under unequal nationally determined contributions

International Environmental Agreements: Doomed to Fail or Destined to Succeed? A Review of the Literature

Transboundary pollution, tax competition and the efficiency of uncoordinated environmental regulation

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