IDEAS home Printed from https://ideas.repec.org/p/ags/ucbecw/6857.html
   My bibliography  Save this paper

A Proposal To Reform The Kyoto Protocol: The Role Of Escape Clauses And Foresight

Author

Listed:
  • Karp, Larry S.
  • Zhao, Jinhua

Abstract

A reform to the Kyoto Protocol that allows signatories to pay a fine instead of meeting the target level of abatement would achieve three goals. First, it would defuse one U.S. objection to the agreement: the concern that the cost of achieving the target might turn out to be extremely high. Second, unlike other cost-reducing measures (such as trade in pollution permits) it would increase the equilibrium number of signatories in a non-cooperative participation game. Third, it would make it easier to force signatories to comply with their obligations. We study the participation game under an escape clause using both a Nash Equilibrium and the concept of a stable set when nations are “farsighted”. We compare our results to a prominent model of International Environmental Agreements (IEAs) which finds that the equilibrium size of an IEA tends to be small when the benefits of cooperation are large. We show that with an escape clause and a properly chosen level of fine, a large IEA can be formed even when the benefits of cooperation are large.

Suggested Citation

  • Karp, Larry S. & Zhao, Jinhua, 2007. "A Proposal To Reform The Kyoto Protocol: The Role Of Escape Clauses And Foresight," CUDARE Working Papers 6857, University of California, Berkeley, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:ucbecw:6857
    DOI: 10.22004/ag.econ.6857
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/6857/files/wp071050.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.6857?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Amitrajeet A. Batabyal, 2011. "The Economics of Hate," Review of Social Economy, Taylor & Francis Journals, vol. 69(4), pages 534-537, December.
    2. Dixit, Avinash & Olson, Mancur, 2000. "Does voluntary participation undermine the Coase Theorem?," Journal of Public Economics, Elsevier, vol. 76(3), pages 309-335, June.
    3. Effrosyni Diamantoudi & Eftichios S. Sartzetakis, 2018. "International Environmental Agreements—The Role of Foresight," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(1), pages 241-257, September.
    4. Michael Finus & Alejandro Caparrós (ed.), 2015. "Game Theory and International Environmental Cooperation," Books, Edward Elgar Publishing, number 15345.
    5. Amit Batabyal, "undated". "Introduction and overview of the economics of international environmental agreements," Working Papers 2000-02, Utah State University, Department of Economics.
    6. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October.
    7. Debraj Ray & Rajiv Vohra, 2001. "Coalitional Power and Public Goods," Journal of Political Economy, University of Chicago Press, vol. 109(6), pages 1355-1384, December.
    8. de Zeeuw, Aart, 2008. "Dynamic effects on the stability of international environmental agreements," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 163-174, March.
    9. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-894, Supplemen.
    10. Stiglitz Joseph, 2006. "A New Agenda for Global Warming," The Economists' Voice, De Gruyter, vol. 3(7), pages 1-4, July.
    11. Hoel, Michael & Karp, Larry, 2001. "Taxes and quotas for a stock pollutant with multiplicative uncertainty," Journal of Public Economics, Elsevier, vol. 82(1), pages 91-114, October.
    12. Johan Eyckmans, 2001. "On the farsighted stability of the Kyoto Protocol," Energy, Transport and Environment Working Papers Series ete0103, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
    13. Licun Xue, 1998. "Coalitional stability under perfect foresight," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(3), pages 603-627.
    14. Mariotti, Marco, 1997. "A Model of Agreements in Strategic Form Games," Journal of Economic Theory, Elsevier, vol. 74(1), pages 196-217, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. de Zeeuw, A.J., 2008. "Dynamic effects on the stability of international environmental agreements," Other publications TiSEM 41f27f71-d6e6-463e-9b03-f, Tilburg University, School of Economics and Management.
    2. Karp, Larry & Zhao, Jinhua, 2008. "A Proposal for the Design of the Successor to the Kyoto Protocol," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt35n7x8mt, Department of Agricultural & Resource Economics, UC Berkeley.
    3. Larry Karp & Jinhua Zhao, 2010. "International Environmental Agreements: Emissions Trade, Safety Valves and Escape Clauses," Revue économique, Presses de Sciences-Po, vol. 61(1), pages 153-182.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Karp, Larry & Simon, Leo, 2013. "Participation games and international environmental agreements: A non-parametric model," Journal of Environmental Economics and Management, Elsevier, vol. 65(2), pages 326-344.
    2. Hong, Fuhai & Karp, Larry, 2012. "International Environmental Agreements with mixed strategies and investment," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 685-697.
    3. Kováč, Eugen & Schmidt, Robert C., 2021. "A simple dynamic climate cooperation model," Journal of Public Economics, Elsevier, vol. 194(C).
    4. Hassan Benchekroun & Amrita Ray Chaudhuri, 2015. "Cleaner Technologies and the Stability of International Environmental Agreements," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(6), pages 887-915, December.
    5. Giovanni Villani & Marta Biancardi, 2011. "Largest Consistent Set in International Environmental Agreements," Quaderni DSEMS 04-2011, Dipartimento di Scienze Economiche, Matematiche e Statistiche, Universita' di Foggia.
    6. Michèle Breton & Michel Keoula, 2012. "Farsightedness in a Coalitional Great Fish War," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(2), pages 297-315, February.
    7. Effrosyni Diamantoudi & Eftichios S. Sartzetakis, 2018. "International Environmental Agreements—The Role of Foresight," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(1), pages 241-257, September.
    8. Mason, Charles F. & Polasky, Stephen & Tarui, Nori, 2017. "Cooperation on climate-change mitigation," European Economic Review, Elsevier, vol. 99(C), pages 43-55.
    9. Marta Biancardi & Giovanni Villani, 2011. "Largest Consistent Set in International Environmental Agreements," Computational Economics, Springer;Society for Computational Economics, vol. 38(3), pages 407-423, October.
    10. Ngo Van Long, 2014. "The Green Paradox in Open Economies," CESifo Working Paper Series 4639, CESifo.
    11. Sareh Vosooghi & Maria Arvaniti & Rick van der Ploeg, 2022. "Self-Enforcing Climate Coalitions for Farsighted Countries: Integrated Analysis of Heterogeneous Countries," CESifo Working Paper Series 9768, CESifo.
    12. Karp, Larry & Sakamoto, Hiroaki, 2021. "Sober optimism and the formation of international environmental agreements," Journal of Economic Theory, Elsevier, vol. 197(C).
    13. Santiago J. Rubio & Alistair Ulph, 2006. "Self-enforcing international environmental agreements revisited," Oxford Economic Papers, Oxford University Press, vol. 58(2), pages 233-263, April.
    14. Dritan Osmani & Richard S.J. Tol, 2007. "Toward Farsightedly Stable International Environmental Agreements, Part two," Working Papers FNU-149, Research unit Sustainability and Global Change, Hamburg University, revised Oct 2007.
    15. Johan Eyckmans & Michael Finus, 2006. "New roads to international environmental agreements: the case of global warming," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 7(4), pages 391-414, December.
    16. Dritan Osmani & Richard S.J. Tol, 2008. "Evolution in time of Farsightedly Stable Coalitions: An Application of FUND," Working Papers FNU-162, Research unit Sustainability and Global Change, Hamburg University, revised May 2008.
    17. Alejandro Caparrós & Michael Finus, 2020. "Public good agreements under the weakest‐link technology," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(3), pages 555-582, June.
    18. Thomas Eichner & Rüdiger Pethig, 2012. "Stable climate coalitions (Nash) and international trade," Volkswirtschaftliche Diskussionsbeiträge 155-12, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    19. Al Khourdajie, Alaa & Finus, Michael, 2020. "Measures to enhance the effectiveness of international climate agreements: The case of border carbon adjustments," European Economic Review, Elsevier, vol. 124(C).
    20. Effrosyni Diamantoudi & Eftichios Sartzetakis, 2015. "International environmental agreements: coordinated action under foresight," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(3), pages 527-546, August.

    More about this item

    Keywords

    Environmental Economics and Policy;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ucbecw:6857. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/dabrkus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.