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Free‐Riding and Cooperation in Environmental Games
Author(s) -
ESPINOLAARREDONDO ANA
Publication year - 2009
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2008.01399.x
Subject(s) - negotiation , treaty , investment (military) , economics , quality (philosophy) , international investment , environmental quality , clean technology , international economics , international trade , emerging technologies , foreign direct investment , macroeconomics , political science , computer science , law , philosophy , epistemology , artificial intelligence , politics
This paper examines the negotiation of an international environmental agreement in which different countries determine the (nonenforceable) promises of investment in clean technologies to be included in the agreement. Furthermore, it analyzes countries' optimal investment in emission‐reducing technologies, considering that, in addition to the utility that a country perceives from an improved environmental quality, it is also concerned about the relative fulfillment of the terms specified in the international agreement either by itself or by others. I show, first, why countries may prefer to shift most promises of investment in clean technologies to other countries, despite the fact that these promises are usually nonenforceable by any international organization. Second, I determine countries' optimal investments in these technologies, and analyze how their particular investments depend on how demanding the international agreement is, and on the importance that countries assign to each others' relative fulfillment of their part of the treaty.