Towards a global climate constitution

In this paper my concern is the study of the incentives of individual countries to sign an international climate agreement that sets the terms of a climate constitution, that is, it establishes emission rights and rules for trading these rights to combat the climate problem effectively and efficiently

Sticks and Carrots for the Design of International Climate Agreements with Renegotiations

This paper examines stability of international climate agreements for carbon abatement under an optimal transfer rule and renegotiations. The optimal transfer rule suggested to stabilise international environmental agreements (Weikard 2005, Carraro, Eyckmans and Finus 2006) is no longer optimal when agreements are renegotiated. We determine the conditions for optimal self-enforcing sequences of agreements. If these conditions are met, then transfer payments can be arranged such that no country wants to change its membership status at any stage. In order to demonstrate the applicability of our condition we use the STACO model, a 12-regions global model, to assess the impact of welldesigned transfer rules on the stability of an international climate agreement. Although there are strong free-rider incentives, we find a stable grand coalition in the first commitment period in a game with one round of renegotiation

Poverty, environment and natural resource use: introduction to the special issue

A growing population and growing per capita consumption threaten the environment and the natural resource base. Where natural resources are at risk, the livelihoods of many are at risk as well. In May 2006 the Environmental Economics and Natural Resources Group of Wageningen University organized a conference on `Poverty, Environment and Natural Resource Use¿ with the aim of contributing to a better understanding of the links between poverty and the natural resource base. The state of the environment affects people's living conditions ¿ and poverty affects environmental quality. Environmental policies cannot be designed and natural resources cannot be managed without appropriate consideration of local people's reactions to those policies and management decisions

Cartel Stability under an Optimal Sharing Rule

Previous work on the formation and stability of cartels has focused on the case of identical players. This assumption is very restrictive in many economic environments. This paper analyses stability of cartels in games with heterogeneous players and spillovers to non-members. I introduce a sharing rule for coalition payoffs, called "optimal sharing" which stabilises all cartels that are possibly stable under any rule. Under optimal sharing the grand coalition is the unique stable cartel if spillovers are negative. I introduce a new property, called "non-essentiality" and determine the set of stable cartels under optimal sharing if spillovers are positive and if the non-essentiality property applies. Finally I analyse cartel stability under optimal sharing in simple public goods game with heterogeneous players. My results show – in contrast to earlier findings for identical players – that large coalitions may well be stable.Cartel stability, Coalition formation games with spillovers, Partition function approach, Optimal sharing rule