Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/191364 
Year of Publication: 
2018
Series/Report no.: 
Working Paper No. 022.2018
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
The present paper examines the stability of self-enforcing International Environmental Agreements (IEAs) among heterogeneous countries in a twostage emission game. In the first stage each country decides whether or not to join the agreement, while in the second stage the quantity of emissions is chosen simultaneously by all countries. We use quadratic benefit and environmental damage functions and assume k types of countries that differ in their sensitivity to the global pollutant. We find that the introduction of heterogeneity does not yield larger stable coalitions. In particular, we show that, in the case of two types, when stable coalitions exist their size is very small, and, if the asymmetry is strong enough, they include only one type of countries. Moreover, heterogeneity can reduce the scope of cooperation relative to the homogeneous case. We demonstrated that introducing asymmetry into a stable, under symmetry, agreement can disturb stability.
Subjects: 
Environmental Agreements
JEL: 
D6
Q5
C7
Document Type: 
Working Paper

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