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We consider a set of countries that wish to sign an international agreement to control pollution. The problem is studied from the perspective of cooperative games and three possible definitions of the characteristic function of the game are analyzed. We further address the issue of free riding and the stability of coalitions. The challenge is to find a possible reconciliation of the two approaches. In other words, we are looking for a payment function which ensures the formation and stability of a large coalition, even if we consider that different countries are playing noncooperatively and are acting only in their own interest. Our results suggest that it is difficult to deter free riding and that no large coalition can emerge if countries decide to play non-cooperatively.

Using a two-player differential game approach, this paper deals with the issue of tropical deforestation. The assumption is that developing forestry countries (called the South) do not, or cannot, necessarily have the same utility for forest conservation than the developed countries (called the North). Given the global nature of the problem, we assume that it may be wise that the North offers financial support to the South to help in achieving a sustainable forest policy. We derive sustainable and short-run deforestation policies and provide a transfer mechanism which insures that the South will indeed implement the sustainable one.

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