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Local and Global Pollution and International Environmental Agreements in a Network Approach

Author

Listed:
  • Günther, Michael

    (Center for Mathematical Economics, Bielefeld University)

  • Hellmann, Tim

    (Center for Mathematical Economics, Bielefeld University)

Abstract
Increasing concerns about climate change have given rise to the formation of International Environmental Agreements (IEAs) as a possible solution to limit global pollution effects. In this paper, we study the stability of IEAs in a repeated game framework where we restrict to strategies which are simple and invariant to renegotiation. Our main contribution to the literature on IEAs is that we allow for heterogeneous patterns of pollution such that additional to a global effect of pollution there are local pollution effects represented by a network structure. We show that stable IEAs exist if the network structure is balanced. Too large asymmetries in the degree of local spillovers may however lead to non-existence of stable structures. The generality of our approach allows for several applications to general problems in the provision of public goods.

Suggested Citation

  • Günther, Michael & Hellmann, Tim, 2015. "Local and Global Pollution and International Environmental Agreements in a Network Approach," Center for Mathematical Economics Working Papers 545, Center for Mathematical Economics, Bielefeld University.
    • Handle: RePEc:bie:wpaper:545
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    File URL: https://pub.uni-bielefeld.de/download/2772290/2772295
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Weak renegotiation-proofness; Coalition structures; International environmental agreements; Networks;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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