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Sober optimism and the formation of international environmental agreements

Author

Listed:
  • Hiroaki SAKAMOTO
  • Larry KARP
Abstract
We analyze a dynamic model of international environmental agreements (IEAs) where countries cannot make long-term commitments or use sanctions or rewards to induce cooperation. Countries can communicate with each other to build endogenous beliefs about the random consequences of (re)opening negotiation. If countries are patient, an effective agreement can be reached after a succession of short-lived ineffective agreements. This eventual success requires \sober optimism": the understanding that cooperation is possible but not easy to achieve. Negotiations matter because beliefs are important. An empirical application illustrates the importance of sober optimism in the climate agreement.

Suggested Citation

  • Hiroaki SAKAMOTO & Larry KARP, 2019. "Sober optimism and the formation of international environmental agreements," Discussion papers e-19-002, Graduate School of Economics , Kyoto University.
    • Handle: RePEc:kue:epaper:e-19-002
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    Cited by:

    1. Bühl, Vitus & Schmidt, Robert C., 2020. "Coordinating to avoid the catastrophe," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224649, Verein für Socialpolitik / German Economic Association.
    2. Humberto Llavador & John E. Roemer, 2019. "Global unanimity agreement on the carbon budget," Economics Working Papers 1646, Department of Economics and Business, Universitat Pompeu Fabra.
    3. Kováč, Eugen & Schmidt, Robert C., 2021. "A simple dynamic climate cooperation model," Journal of Public Economics, Elsevier, vol. 194(C).
    4. Colombo, Luca & Labrecciosa, Paola & Van Long, Ngo, 2022. "A dynamic analysis of international environmental agreements under partial cooperation," European Economic Review, Elsevier, vol. 143(C).
    5. Okada, Akira, 2023. "A dynamic climate negotiation game achieving full cooperation," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 657-669.
    6. Eichner, Thomas & Schopf, Mark, 2024. "On breadth and depth of climate agreements with pledge-and-review bargaining," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    7. 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).
    8. Bühl, Vitus & Schmidt, Robert C., 2024. "Coordinating to avoid the catastrophe," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    9. Rohrer, Anna Viktoria & Rubio, Santiago J., 2024. "The strategic role of adaptation in international environmental agreements," Journal of Environmental Economics and Management, Elsevier, vol. 124(C).
    10. Stefano Carattini & Andreas Löschel, 2020. "Managing Momentum in Climate Negotiations," CESifo Working Paper Series 8717, CESifo.
    11. Eichner, Thomas & Schopf, Mark, 2021. "Pledge and Review Bargaining in Environmental Agreements: Kyoto vs. Paris," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242450, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    Environmental agreements; Climate change; Dynamic game;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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