Optimal Transfers and Participation Decisions in International Environmental Agreements

47 Pages Posted: 12 Apr 2005

See all articles by Carlo Carraro

Carlo Carraro

Ca' Foscari University of Venice; CMCC - Euro Mediterranean Centre for Climate Change (Climate Policy Division); IPCC; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Centre for European Policy Studies, Brussels; Green Growth Knowledge Platform

Johan Eyckmans

Catholic University of Leuven (KUL) - Center for Economic Studies

Michael Finus

University of Stirling

Multiple version iconThere are 2 versions of this paper

Date Written: April 2005

Abstract

Transfers often play a crucial role in encouraging participation in international environmental agreements (IEAs). However, the economic literature on transfers is very limited and results achieved so far do not exploit the full potential of transfers for successful treaty-making. Therefore, in this paper, we develop a framework that enables us to study the role of transfers in a more systematic way. We propose a design for transfers using both internal and external financial resources and making welfare optimal agreements self-enforcing. To illustrate the relevance of our transfer scheme for actual treaty-making, we use a well-known integrated assessment model of climate change to show how appropriate transfers may be able to induce almost all countries into signing a self-enforcing climate treaty.

Keywords: Self-enforcing international environmental agreements, Climate policy, Transfers

JEL Classification: C72, H23, Q25, Q28

Suggested Citation

Carraro, Carlo and Eyckmans, Johan and Finus, Michael, Optimal Transfers and Participation Decisions in International Environmental Agreements (April 2005). FEEM Working Paper No. 50.05, University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. 44/06, Available at SSRN: https://ssrn.com/abstract=702761 or http://dx.doi.org/10.2139/ssrn.702761

Carlo Carraro (Contact Author)

Ca' Foscari University of Venice ( email )

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HOME PAGE: http://www.carlocarraro.org/

CMCC - Euro Mediterranean Centre for Climate Change (Climate Policy Division) ( email )

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Centre for European Policy Studies, Brussels

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Green Growth Knowledge Platform ( email )

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Johan Eyckmans

Catholic University of Leuven (KUL) - Center for Economic Studies ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Michael Finus

University of Stirling ( email )

Stirling, Scotland FK9 4LA
United Kingdom

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