Informational Benefits of International Environmental Agreements

18 Pages Posted: 10 Jun 2008

See all articles by Amihai Glazer

Amihai Glazer

University of California, Irvine - Department of Economics

Stef Proost

KU Leuven - Department of Economics

Date Written: May 2008

Abstract

Given the difficulty of monitoring, and even more so of enforcing, International Environmental Agreements, it is surprising that they are signed and implemented. This paper offers a theoretical model, which addresses this issue. The focus is on informational and coordination problems. A country which is unsure about the benefits of environmental policy may find that the benefits are higher the greater the number of other countries which lean towards taking action. Whereas each country may individually take weak environmental action, in equilibrium several countries may take strong action if they expect others to. An International Environmental Agreement can thus be selfenforcing. Such effects can appear even if international environmental spillovers are absent, and even if monitoring and enforcement are infeasible. Our approach can explain additional phenomena: why a country known to care little about the environment may deeply influence other countries if it takes strong environmental action, why lags may appear between the signing of an agreement and its implementation, and how requirements for approval by several bodies within a country can increase support for environmental action.

Keywords: Environmental policy, international agreements, signaling, regulation

JEL Classification: Q58, D82, L51

Suggested Citation

Glazer, Amihai and Proost, Stef V., Informational Benefits of International Environmental Agreements (May 2008). Available at SSRN: https://ssrn.com/abstract=1143244 or http://dx.doi.org/10.2139/ssrn.1143244

Amihai Glazer

University of California, Irvine - Department of Economics ( email )

3151 Social Science Plaza
Irvine, CA 92697-5100
United States
949-854-6563 (Phone)
949-824-2182 (Fax)

Stef V. Proost (Contact Author)

KU Leuven - Department of Economics ( email )

Leuven, B-3000
Belgium
016 32 66 35 (Phone)
016 32 67 96 (Fax)

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