Applications of negotiation theory to water issues

The authors review the applications of noncooperative bargaining theory to waterrelated issues-which fall in the category of formal models of negotiation. They aim to identify the conditions under which agreements are likely to emerge and their characteristics, to support policymakers in devising the"rules of the game"that could help obtain a desired result. Despite the fact that allocation of natural resources, especially trans-boundary allocation, has all the characteristics of a negotiation problem, there are not many applications of formal negotiation theory to the issue. Therefore, the authors first discuss the noncooperative bargaining models applied to water allocation problems found in the literature. Key findings include the important role noncooperative negotiations can play in cases where binding agreements cannot be signed; the value added of politically and socially acceptable compromises; and the need for a negotiated model that considers incomplete information over the negotiated resource.Water Supply and Sanitation Governance and Institutions,Town Water Supply and Sanitation,Water and Industry,Environmental Economics&Policies,Water Conservation

Applications of negotiation theory to water issues

The purpose of the paper is to review the applications of non-cooperative bargaining theory to water related issues – which fall in the category of formal models of negotiation. The ultimate aim is that of, on the one hand, identify the conditions under which agreements are likely to emerge, and their characteristics; and, on the other hand, to support policy makers in devising the “rules of the game” that could help obtain a desired result. Despite the fact that allocation of natural resources, especially of trans-boundary nature, has all the characteristics of a negotiation problem, there are not many applications of formal negotiation theory to the issue. Therefore, this paper first discusses the noncooperative bargaining models applied to water allocation problems found in the literature. Particular attention will be given to those directly modelling the process of negotiation, although some attempts at finding strategies to maintain the efficient allocation solution will also be illustrated. In addition, this paper will focus on Negotiation Support Systems (NSS), developed to support the process of negotiation. This field of research is still relatively new, however, and NSS have not yet found much use in real life negotiation. The paper will conclude by highlighting the key remaining gaps in the literature.Negotiation theory, Bragaining, Coalitions, Fairness, Agreements

Applications of Negotiation Theory to Water Issues

The purpose of the paper is to review the applications of non-cooperative bargaining theory to water related issues – which fall in the category of formal models of negotiation. The ultimate aim is that to, on the one hand, identify the conditions under which agreements are likely to emerge, and their characteristics; and, on the other hand, to support policy makers in devising the “rules of the game” that could help obtain a desired result. Despite the fact that allocation of natural resources, especially of trans-boundary nature, has all the characteristics of a negotiation problem, there are not many applications of formal negotiation theory to the issue. Therefore, this paper first discusses the non-cooperative bargaining models applied to water allocation problems found in the literature. Particular attention will be given to those directly modelling the process of negotiation, although some attempts at finding strategies to maintain the efficient allocation solution will also be illustrated. In addition, this paper will focus on Negotiation Support Systems (NSS), developed to support the process of negotiation. This field of research is still relatively new, however, and NSS have not yet found much use in real life negotiation. The paper will conclude by highlighting the key remaining gaps in the literature.Negotiation theory, Water, Agreeements, Stochasticity, Stakeholders

Simulating the Impact on the Local Economy of Alternative Management Scenarios for Natural Areas

This working paper estimates the impact on the local economy of the High Garda Natural Park of alternative management scenarios for the West Garda Regional Forest. The local economy is specialized in tourist services and strongly linked to the tourist presence and their level of expenditure. We wish to investigate the effects of the participative management strategy, which takes into account users preferences and the non-participative strategy, using the SAM multiplier analysis. The local SAM has been constructed considering three sectors: agriculture, tourism and a third aggregate sector including all the other activities. The resident population has been divided into two categories: residents employed in the tourist sector and the remaining resident population. The SAM analysis shows that the accounting representation of the local economy is meaningful and that the participative program, if chosen by the central regional management, would be the most desirable program also at the local level.Tourism, SAM, Multiplier analysis

Climate Coalitions: A Theoretical and Computational Appraisal

Using an updated version of the CWS model (introduced by Eyckmans and Tulkens in Resource and Energy Economics 2003), this paper intends to evaluate with numbers the respective merits of two competing notions of coalition stability in the standard global public goods model as customarily applied to the climate change problem. After a reminder of the model structure and of the definition of the two game theoretical stability notions involved – namely, core stability and internal-external stability, the former property is shown to hold for the grand coalition in the CWS model only if resource transfers of a specific form between countries are introduced. It is further shown that while the latter property holds neither for the grand coalition nor for most large coalitions, it is nevertheless verified in a weak sense that involves transfers (dubbed “potential internal stability”) for most small coalitions. The reason for this difference is brought to light, namely the differing rationale that inspires the transfers in either case. Finally, it is shown that the stable coalitions that perform best (in terms of carbon concentration and global welfare) are always composed of both industrialized and developing countries. Two sensitivity analyses confirm the robustness of all these results.Climate Change, Coalitions, Simulation, Integrated Assessment

Complexity and the Economics of Climate Change: a Survey and a Look Forward

URL des Documents de travail : http://ces.univ-paris1.fr/cesdp/cesdp2016.htmlDocuments de travail du Centre d'Economie de la Sorbonne 2016.58 - ISSN : 1955-611XWe provide a survey of the micro and macro economics of climate change from a complexity science perspective and we discuss the challenges ahead for this line of research. We identify four areas of the literature where complex system models have already produced valuable insights: (i) coalition formation and climate negotiations, (ii) macroeconomic impacts of climate-related events, (iii) energy markets and (iv) diffusion of climate-friendly technologies. On each of these issues, accounting for heterogeneity, interactions and disequilibrium dynamics provides a complementary and novel perspective to the one of standard equilibrium models. Furthermore, it highlights the potential economic benefits of mitigation and adaptation policies and the risk of under-estimating systemic climate change-related risks

A General Equilibrium Analysis of Climate Change Impacts on Tourism

This paper studies the economic implications of climate-change-induced variations in tourism demand, using a world CGE model. The model is first re-calibrated at some future years, obtaining hypothetical benchmark equilibria, which are subsequently perturbed by shocks, simulating the effects of climate change. We portray the impact of climate change on tourism by means of two sets of shocks, occurring simultaneously. The first shocks translate predicted variations in tourist flows into changes of consumption preferences for domestically produced goods. The second shocks reallocate income across world regions, simulating the effect of higher or lower tourists’ expenditure. Our analysis highlights that variations in tourist flows will affect regional economies in a way that is directly related to the sign and magnitude of flow variations. At a global scale, climate change will ultimately lead to a welfare loss, unevenly spread across regions.Climate change, Computable general equilibrium models, Tourism

Endogenous Minimum Participation in International Environmental Treaties

Many international treaties come into force only after a minimum number of countries have signed and ratified the treaty. Why do countries agree to introduce a minimum participation constraint among the rules characterising an international treaty? This question is particularly relevant in the case of environmental treaties dealing with global commons, where free-riding incentives are strong. Is a minimum participation rule a way to offset these free-riding incentives? Why do countries that know they have an incentive to free-ride accept to “tie their hands” through the introduction of a minimum participation constraint? This paper addresses the above questions by analysing a three-stage non-cooperative coalition formation game. In the first stage, countries set the minimum coalition size that is necessary for the treaty to come into force. In the second stage, countries decide whether to sign the treaty. In the third stage, the equilibrium values of the decision variables are set. At the equilibrium, both the minimum participation constraint and the number of signatories – the coalition size – are determined. This paper shows that a non-trivial partial coalition, sustained by a binding minimum participation constraint, forms at the equilibrium. This paper thus explains why in international negotiations all countries often agree on a minimum participation rule even when some of them do not intend to sign the treaty. The paper also analyses the optimal size of the minimum participation constraint.Agreements, Climate, Negotiations, Policy, Incentives

Climate Change, Energy Demand and Market Power in a General Equilibrium Model of the World Economy

Future energy demand will be affected by changes in prices and income, but also by other factors, like temperature levels. This paper draws upon an econometric study, disentangling the contribution of temperature in the determination of the annual regional demand for energy goods. Combining estimates of temperature elasticities with scenarios of future climate change, it is possible to assess variations in energy demand induced (directly) by the global warming. We use this information to simulate a change in the demand structure of households in a CGE model of the world economy, in a set of assessment exercises. The changing demand structure triggers a structural adjustment process, influencing trade flows, regional competitiveness of industries and regions, and welfare. We also consider the possible existence of imperfect competition in the energy markets, analyzing the impact of changes in energy demand with an alternative model version, in which energy industries are modeled as Cournot oligopolies.Climate Change, Energy, Computable General Equilibrium Models, Imperfect Competition

Complexity and the Economics of Climate Change: A Survey and a Look Forward

Climate change is one of the most daunting challenges human kind has ever faced. In the paper, we provide a survey of the micro and macro economics of climate change from a complexity science perspective and we discuss the challenges ahead for this line of research. We identify four areas of the literature where complex system models have already produced valuable insights: (i) coalition formation and climate negotiations, (ii) macroeconomic impacts of climate-related events, (iii) energy markets and (iv) diffusion of climatefriendly technologies. On each of these issues, accounting for heterogeneity, interactions and disequilibrium dynamics provides a complementary and novel perspective to the one of standard equilibrium models. Furthermore, it highlights the potential economic benefits of mitigation and adaptation policies and the risk of under-estimating systemic climate change-related risks