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International Environmental Permit Trade and Debt: the Consequences of Country Sovereignty and Cross‐Default Policies *
Author(s) -
Mohr Ernst
Publication year - 1995
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/j.1467-9396.1995.tb00048.x
Subject(s) - debtor , economics , international economics , international trade , incentive , debt , sovereignty , linkage (software) , external debt , payment , default , creditor , finance , market economy , biochemistry , chemistry , politics , political science , law , gene
We investigate the joint occurrence of international intertemporal trade and international environmental‐permit trade, both of which are subject to country sovereignty. Assuming that side payments cannot be made to keep a debtor country from terminating international environmental cooperation, we analyze the impact of these two trade opportunities on a debtor country's incentive to continue environmental cooperation. We also show how, by way of a suitable strategic linkage between debt and permit trade, the public good of ensuring continued environmental cooperation can be provided by the supply side of private international loans.