Self-enforcing environmental agreements and capital mobility

Arbeitspapier

In a multi-country model with mobile capital and global pollution this paper analyzes the stability of self-enforcing environmental agreements (IEAs) when the coalition formed by the signatory countries plays Nash. In accordance with previous environmental literature we show that there exists a unique self-enforcing IEA consisting of two or three signatory countries if emissions tax rates are strategic substitutes. However, emissions tax rates are strategic complements if the pollution is not too detrimental. In that case we find very small self-enforcing IEAs, as before, but now the socially optimal agreement among all countries may be self-enforcing as well. Special emphasis is placed on the investigation and interpretation of the conditions which render stable the grand coalition.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Volkswirtschaftliche Diskussionsbeiträge ; No. 162-13

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Intergovernmental Relations; Federalism; Secession ; Environmental Economics: Government Policy
• Subject: capital mobility ; self-enforcing environmental agreements ; emissions tax ; Nash behavior

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Eichner, Thomas ; Pethig, Rüdiger
• Event: Veröffentlichung
• (who): Universität Siegen, Fakultät III, Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht
• (where): Siegen
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/98424
• Last update: 10.03.2025, 11:44 AM CET