[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/p/zen/wpaper/75.html
   My bibliography  Save this paper

Boon or Bane? Trade Sanctions and the Stability of InternationalEnvironmental Agreements

Author

Listed:
  • Achim Hagen

    (Humboldt-Universität zu Berlin)

  • Jan Schneider

    (Carl von Ossietzky University Oldenburg)

Abstract
In spite of scientific agreement on the negative effects of anthropogenic climate change, efforts to find cooperative solutions on the international level have been unsatisfactory so far. Trade sanctions in the form of import tariffs are one principal measure discussed as a means to foster cooperation. Former studies have concluded that import tariffs are an effective mechanism to establish international cooperation. However, most of these studies rely on the assumption that outsiders are not able to retaliate, i.e. to implement import tariffs themselves. In this paper we use combined analytical and numerical analysis to investigate implications of retaliation. We find a threshold effect: below a certain coalition size the effect of retaliation predominates and decreases incentives to be a coalition member. In coalitions above the threshold size the effect of trade sanctions that stabilizes coalitions dominates and enables the formation of larger stable coalitions. Our analysis suggests that only after a sufficiently large climate coalition has already been formed, the threat of trade sanctions might be an effective stick to establish the grand coalition.

Suggested Citation

  • Achim Hagen & Jan Schneider, 2017. "Boon or Bane? Trade Sanctions and the Stability of InternationalEnvironmental Agreements," ZenTra Working Papers in Transnational Studies 75 / 2017, ZenTra - Center for Transnational Studies.
    • Handle: RePEc:zen:wpaper:75
    as

    Download full text from publisher

    File URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3055629
    File Function: Current version, 2017
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Christoph Böhringer & Jared C. Carbone & Thomas F. Rutherford, 2016. "The Strategic Value of Carbon Tariffs," American Economic Journal: Economic Policy, American Economic Association, vol. 8(1), pages 28-51, February.
    2. Paola Conconi & Carlo Perroni, 2002. "Issue Linkage and Issue Tie-in in International Negotiations," ULB Institutional Repository 2013/5839, ULB -- Universite Libre de Bruxelles.
    3. Scott BARRETT, 2011. "Rethinking Climate Change Governance and its Relationship to the World Trading System," Working Papers P20, FERDI.
    4. Krichene, Noureddine, 2002. "World crude oil and natural gas: a demand and supply model," Energy Economics, Elsevier, vol. 24(6), pages 557-576, November.
    5. Christoph Böhringer & Thomas F. Rutherford, 2017. "Paris after Trump: An Inconvenient Insight," CESifo Working Paper Series 6531, CESifo.
    6. Hans-Peter Weikard & Leo Wangler & Andreas Freytag, 2015. "Minimum Participation Rules with Heterogeneous Countries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(4), pages 711-727, December.
    7. Eichner, Thomas & Pethig, Rüdiger, 2013. "Self-enforcing environmental agreements and international trade," Journal of Public Economics, Elsevier, vol. 102(C), pages 37-50.
    8. Effrosyni Diamantoudi & Eftichios S. Sartzetakis, 2006. "Stable International Environmental Agreements: An Analytical Approach," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(2), pages 247-263, May.
    9. Marchiori, Carmen & Dietz, Simon & Tavoni, Alessandro, 2017. "Domestic politics and the formation of international environmental agreements," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 115-131.
    10. Carlo Carraro & Carmen Marchiori & Sonia Oreffice, 2009. "Endogenous Minimum Participation in International Environmental Treaties," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 42(3), pages 411-425, March.
    11. Böhringer, Christoph & Balistreri, Edward J. & Rutherford, Thomas F., 2012. "The role of border carbon adjustment in unilateral climate policy: Overview of an Energy Modeling Forum study (EMF 29)," Energy Economics, Elsevier, vol. 34(S2), pages 97-110.
    12. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-894, Supplemen.
    13. Ringlund, Guro Bornes & Rosendahl, Knut Einar & Skjerpen, Terje, 2008. "Does oilrig activity react to oil price changes An empirical investigation," Energy Economics, Elsevier, vol. 30(2), pages 371-396, March.
    14. Pavlova, Yulia & de Zeeuw, Aart, 2013. "Asymmetries in international environmental agreements," Environment and Development Economics, Cambridge University Press, vol. 18(1), pages 51-68, February.
    15. Felder Stefan & Rutherford Thomas F., 1993. "Unilateral CO2 Reductions and Carbon Leakage: The Consequences of International Trade in Oil and Basic Materials," Journal of Environmental Economics and Management, Elsevier, vol. 25(2), pages 162-176, September.
    16. Michael Hoel & Kerstin Schneider, 1997. "Incentives to participate in an international environmental agreement," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 9(2), pages 153-170, March.
    17. Conconi, Paola & Perroni, Carlo, 2002. "Issue linkage and issue tie-in in multilateral negotiations," Journal of International Economics, Elsevier, vol. 57(2), pages 423-447, August.
    18. Balistreri, Edward J. & Markusen, James R., 2009. "Sub-national differentiation and the role of the firm in optimal international pricing," Economic Modelling, Elsevier, vol. 26(1), pages 47-62, January.
    19. Tancr�de Voituriez & Xin Wang, 2011. "Getting the carbon price right through climate border measures: a Chinese perspective," Climate Policy, Taylor & Francis Journals, vol. 11(5), pages 1257-1261, September.
    20. Santiago J. Rubio & Alistair Ulph, 2006. "Self-enforcing international environmental agreements revisited," Oxford Economic Papers, Oxford University Press, vol. 58(2), pages 233-263, April.
    21. Christoph Böhringer & André Müller & Jan Schneider, 2015. "Carbon Tariffs Revisited," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(4), pages 629-672.
    22. Balistreri, Edward J. & Rutherford, Thomas F., 2012. "Subglobal carbon policy and the competitive selection of heterogeneous firms," Energy Economics, Elsevier, vol. 34(S2), pages 190-197.
    23. Ralph Ossa, 2014. "Trade Wars and Trade Talks with Data," American Economic Review, American Economic Association, vol. 104(12), pages 4104-4146, December.
    24. Branger, Frédéric & Quirion, Philippe, 2014. "Would border carbon adjustments prevent carbon leakage and heavy industry competitiveness losses? Insights from a meta-analysis of recent economic studies," Ecological Economics, Elsevier, vol. 99(C), pages 29-39.
    25. Luke Kemp, 2017. "Better out than in," Nature Climate Change, Nature, vol. 7(7), pages 458-460, July.
    26. Achim Hagen & Klaus Eisenack, 2015. "International Environmental Agreements with Asymmetric Countries: Climate Clubs vs. Global Cooperation," Working Papers 2015.58, Fondazione Eni Enrico Mattei.
    27. Eric Neumayer, 2002. "Does Trade Openness Promote Multilateral Environmental Cooperation?," The World Economy, Wiley Blackwell, vol. 25(6), pages 815-832, June.
    28. Marrouch, Walid & Ray Chaudhuri, Amrita, 2016. "International Environmental Agreements: Doomed to Fail or Destined to Succeed? A Review of the Literature," International Review of Environmental and Resource Economics, now publishers, vol. 9(3-4), pages 245-319, September.
    29. Fuentes-Albero, Cristina & Rubio, Santiago J., 2010. "Can international environmental cooperation be bought?," European Journal of Operational Research, Elsevier, vol. 202(1), pages 255-264, April.
    30. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    31. Gilbert E. Metcalf & James H. Stock, 2017. "Integrated Assessment Models and the Social Cost of Carbon: A Review and Assessment of U.S. Experience," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 11(1), pages 80-99.
    32. Michael Hoel, 1992. "International environment conventions: The case of uniform reductions of emissions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(2), pages 141-159, March.
    33. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October.
    34. Barrett, Scott, 1997. "The strategy of trade sanctions in international environmental agreements," Resource and Energy Economics, Elsevier, vol. 19(4), pages 345-361, November.
    35. Peter Egger & Christoph Jeßberger & Mario Larch, 2011. "Trade and investment liberalization as determinants of multilateral environmental agreement membership," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(6), pages 605-633, December.
    36. Lessmann, Kai & Marschinski, Robert & Edenhofer, Ottmar, 2009. "The effects of tariffs on coalition formation in a dynamic global warming game," Economic Modelling, Elsevier, vol. 26(3), pages 641-649, May.
    37. Scott Barrett, 2011. "Rethinking Climate Change Governance and Its Relationship to the World Trading System," The World Economy, Wiley Blackwell, vol. 34(11), pages 1863-1882, November.
    38. Stiglitz Joseph, 2006. "A New Agenda for Global Warming," The Economists' Voice, De Gruyter, vol. 3(7), pages 1-4, July.
    39. Thomas Eichner & Rüdiger Pethig, 2014. "Self-Enforcing Environmental Agreements, Trade, and Demand- and Supply-Side Mitigation Policy," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(3), pages 419-450.
    40. Scott BARRETT, 2011. "Rethinking Climate Change Governance and its Relationship to the World Trading System," Working Papers P20, FERDI.
    41. Barrett, Scott, 2001. "International cooperation for sale," European Economic Review, Elsevier, vol. 45(10), pages 1835-1850, December.
    42. William Nordhaus, 2015. "Climate Clubs: Overcoming Free-Riding in International Climate Policy," American Economic Review, American Economic Association, vol. 105(4), pages 1339-1370, April.
    43. Graham, Paul & Thorpe, Sally & Hogan, Lindsay, 1999. "Non-competitive market behaviour in the international coking coal market," Energy Economics, Elsevier, vol. 21(3), pages 195-212, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Achim Hagen & Klaus Eisenack, 2019. "Climate Clubs Versus Single Coalitions: The Ambition Of International Environmental Agreements," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 10(03), pages 1-19, August.
    2. Achim Hagen & Juan-Carlos Altamirano-Cabrera & Hans-Peter Weikard, 2021. "National political pressure groups and the stability of international environmental agreements," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 21(3), pages 405-425, September.
    3. Matteo Roggero & Leonhard Kähler & Achim Hagen, 2019. "Strategic cooperation for transnational adaptation: lessons from the economics of climate change mitigation," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 19(4), pages 395-410, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hagen, Achim & Schneider, Jan, 2021. "Trade sanctions and the stability of climate coalitions," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    2. Effrosyni Diamantoudi & Eftichios Sartzetakis & Stefania Strantza, 2018. "International Environmental Agreements and Trading Blocks - Can issue linkage enhance cooperation?," Discussion Paper Series 2018_07, Department of Economics, University of Macedonia, revised Jun 2018.
    3. Hagen, Achim & Schopf, Mark, 2024. "Political influence on international climate agreements with border carbon adjustment," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    4. Effrosyni Diamantoudi & Eftichios Sartzetakis & Stefania Strantza, 2018. "International Environmental Agreements and Trading Blocks - Can issue linkage enhance cooperation?," Discussion Paper Series 2018_07, Department of Economics, University of Macedonia, revised Jun 2018.
    5. Christoph Böhringer & Thomas F. Rutherford, 2017. "Paris after Trump: An Inconvenient Insight," CESifo Working Paper Series 6531, CESifo.
    6. Tibor Besedeš & Erik P. Johnson & Xinping Tian, 2020. "Economic determinants of multilateral environmental agreements," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(4), pages 832-864, August.
    7. Thomas Kuhn & Radomir Pestow & Anja Zenker, 2019. "Building Climate Coalitions on Preferential Free Trade Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(2), pages 539-569, October.
    8. Thomas Eichner & Rüdiger Pethig, 2015. "Is trade liberalization conducive to the formation of climate coalitions?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(6), pages 932-955, December.
    9. Erik Ansink & Cees A. Withagen, 2016. "Members, Joiners, Free-Riders, Supporters," CESifo Working Paper Series 5802, CESifo.
    10. Matteo Roggero & Leonhard Kähler & Achim Hagen, 2019. "Strategic cooperation for transnational adaptation: lessons from the economics of climate change mitigation," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 19(4), pages 395-410, October.
    11. Thomas Eichner & Rüdiger Pethig, 2012. "Stable Climate Coalitions (Nash) and International Trade," CESifo Working Paper Series 3915, CESifo.
    12. Emilson C. D. Silva, 2017. "Self-enforcing agreements under unequal nationally determined contributions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(4), pages 705-729, August.
    13. Christoph Böhringer & Jan Schneider & Emmanuel Asane-Otoo, 2021. "Trade in Carbon and Carbon Tariffs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(4), pages 669-708, April.
    14. Al Khourdajie, Alaa & Finus, Michael, 2020. "Measures to enhance the effectiveness of international climate agreements: The case of border carbon adjustments," European Economic Review, Elsevier, vol. 124(C).
    15. Marchiori, Carmen & Dietz, Simon & Tavoni, Alessandro, 2017. "Domestic politics and the formation of international environmental agreements," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 115-131.
    16. Biancardi, Marta & Villani, Giovanni, 2015. "The effects of R&D investments in international environmental agreements with asymmetric countries," Chaos, Solitons & Fractals, Elsevier, vol. 79(C), pages 30-39.
    17. Michael Finus & Stefan Maus, 2008. "Modesty May Pay!," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(5), pages 801-826, October.
    18. Thomas Eichner & Rüdiger Pethig, 2014. "Forging a global environmental agreement through trade sanctions on free riders?," Volkswirtschaftliche Diskussionsbeiträge 171-14, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    19. Kai Lessmann & Robert Marschinski & Michael Finus & Ulrike Kornek & Ottmar Edenhofer, 2014. "Emissions Trading with Non-signatories in a Climate Agreement—an Analysis of Coalition Stability," Manchester School, University of Manchester, vol. 82, pages 82-109, December.
    20. Jakob, Michael, 2021. "Climate policy and international trade – A critical appraisal of the literature," Energy Policy, Elsevier, vol. 156(C).

    More about this item

    Keywords

    international environmental agreements; computable general equilibrium;

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zen:wpaper:75. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Finn Marten Koerner (email available below). General contact details of provider: https://edirc.repec.org/data/zentrde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.