Incentives for International Environmental Cooperation: Theoretic Models and Economic Instruments

Schmidt, Carsten

doi:10.2139/ssrn.136428

Cited by 4 publications

(4 citation statements)

References 60 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Hoel (1991) proposes that if producer lobby groups in a foreign country argue that abatement costs are high, unilateral action in the home country can be used to demonstrate that such reductions can actually be made without high costs. In the same spirit, Schmidt (1998) notes that it is commonly suggested in the political debate that pilot projects or promotion of new and environmentally friendly technologies should be undertaken because benefits from providing new information should be high. To my knowledge, there is no other paper where the implications of cost uncertainty for unilateral action are investigated.…”

mentioning

confidence: 99%

Cost Uncertainty and Unilateral Abatement

Elofsson

2007

Environ Resource Econ

View full text Add to dashboard Cite

Unilateral abatement is sometimes advocated in order to set a good example that will make other countries follow. The aim of this paper is to investigate whether existence of correlated cost uncertainty provides an incentive for a country to undertake unilateral abatement. The theoretical model is driven by two main mechanisms; first, a learning effect, as the follower country might reduce its risk premium as it can observe the cost level in the leader country. Second, there is the public good effect, i.e., the marginal benefit of abatement declines when abatement is a public good and other countries contribute to pollution reductions. Results shows that unilateral abatement would be efficient in reducing uncertainty about the unit costs of abatement if a country with low cost uncertainty would undertake abatement first, while a country with initially high cost uncertainty would follow. However, countries may prefer to act simultaneously because of the larger uncertainties that are inherent in a sequential game. Copyright Springer Science+Business Media, Inc. 2007Baltic Sea, cost uncertainty, Cournot, learning effect, nitrogen, Poland, Stackelberg, Sweden, unilateral abatement, C73, Q25, Q52, Q58,

show abstract

mentioning

confidence: 99%

Cost Uncertainty and Unilateral Abatement

Elofsson

2007

Environ Resource Econ

View full text Add to dashboard Cite

show abstract

“…The implication, however, is not that Hong Kong should refrain from pursuing institutional innovation, but that it ought to be more persistently creative in confronting transboundary pollution in its various forms (e.g. it may have to carry a relatively greater burden than its neighbour, offer inducements to the latter and so forth; Helm, 1991; Carraro, 1997, 2003; Carraro and Siniscalco, 1997; Missfeldt, 1999; Congleton, 2001; Schmidt, 2001; De Sombre, 2002; Rao, 2002; Suskind et al , 2002).…”

Section: Transboundary Challengementioning

confidence: 99%

The political economy of Hong Kong's transboundary pollution

Mushkat¹,

Mushkat

2010

Journal of International Trade Law and Policy

View full text Add to dashboard Cite

PurposeThe principal aim of this paper is to bring into analytical focus the institutional context of the escalation in cross‐border pollution in the Hong Kong/Pearl River Delta region.Design/methodology/approachThe interplay between economic and ecological forces is highlighted against the backdrop of coordination failures in a loosely structured organizational setting.FindingsIt is apparent that powerful bottom‐up forces of economic integration are overwhelming the embryonic machinery hesitantly erected to minimize their adverse effects.Practical implicationsThe heavily decentralized model relied upon to manage complex relationships within the Pearl River Delta region needs to be reassessed, with lessons drawn from other parts of the world, notably Europe, which is also confronting friction between the centre and periphery.Originality/valueThe underlying socio‐physical dynamics, fragile organizational façade and crucial policy choices are outlined in a systematic fashion, with intricate linkages carefully pinpointed.

show abstract

“…by Barrett (1994), Carraro and Siniscalco (1993), Mohr (1995) and (1991b), or Mohr and Thomas (1998). Schmidt (1998) provides a survey of the latter research field.…”

mentioning

confidence: 99%

(Self-) Enforcement of Joint Implementation and Clean Development Mechanism Contracts

Janssen

Eni²,

Mattei³

1999

SSRN Journal

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. A fundamental problem associated with the effectiveness and stability of international JI/CDM contracts arises from the fact that international contracts are difficult to enforce because they are made between entities that fall under the jurisdiction of distinct sovereign states. This paper investigates strategies to cope with this problem from a game theoretic perspective. Terms of use: Documents inThe first section gives a brief idea of the Kyoto Mechanisms. The second section analyses the fundamental problem of international JI/CDM contracts by modelling them as a non-cooperative, simultaneous one-shot game. The two players represent a JI/CDM project sponsor and the foreign project host that implements the JI/CDM project, respectively. It is shown that without any specific provisions against breach of contract, both JI/CDM contract parties will renege on their respective contractual obligations by behaving non-cooperatively. Consequently, the JI/ CDM project will not be realised and the associated efficiency gains are not seized.The third section analyses how to design institutions and strategies that credibly commit both JI/CDM contract parties to meet their contractual obligations by behaving cooperatively. One option for stabilising the JI/CDM contract focuses on the potential role of national environmental authorities. It is explored if they could provide a mechanism by which potential JI/CDM project sponsors could credibly commit to cooperative behaviour. IIIIt is argued that national environmental authorities indeed may serve this function by penalising breaches of JI/CDM contracts on the part of the contract party belonging to its jurisdiction. The paper derives the minimal required level of the penalty.Another option involves sequential moving on the one hand, and on the other hand strategic delegation of contract fulfilment to an agent who plays the JI/CDM game on behalf of the project host. The delegation arrangement is fixed by a binding contract between the principal, i.e. the JI/CDM project host, and an agent. The paper derives conditions that allow the implementation of the cooperative solution of the modified JI/CDM game. These conditions refer to the incentive-compatible payment to the agent.IV

show abstract

Incentives for International Environmental Cooperation: Theoretic Models and Economic Instruments

Cited by 4 publications

References 60 publications

Cost Uncertainty and Unilateral Abatement

Cost Uncertainty and Unilateral Abatement

The political economy of Hong Kong's transboundary pollution

(Self-) Enforcement of Joint Implementation and Clean Development Mechanism Contracts

Contact Info

Product

Resources

About