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Coalition Formation and the Ancillary Benefits of Climate Policy

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  • Finus, Michael
  • Rubbelke, Dirk T G

Abstract

Several studies found ancillary benefits of environmental policy to be of considerable size. These additional private benefits imply not only higher cooperative but also noncooperative abatement targets. However, beyond these largely undisputed important quantitative effects, there are qualitative and strategic implications associated with ancillary benefits: climate policy is no longer a pure but an impure public good. In this paper, we investigate these implications in a setting of non-cooperative coalition formation. In particular, we address the following questions. 1) Do ancillary benefits increase participation in international environmental agreements? 2) Do ancillary benefits raise the success of these treaties in welfare terms?

Suggested Citation

  • Finus, Michael & Rubbelke, Dirk T G, 2008. "Coalition Formation and the Ancillary Benefits of Climate Policy," Stirling Economics Discussion Papers 2008-13, University of Stirling, Division of Economics.
    • Handle: RePEc:stl:stledp:2008-13
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    File URL: http://hdl.handle.net/1893/514
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    Cited by:

    1. Michael Jakob & Kai Lessmann, 2012. "Signaling in international environmental agreements: the case of early and delayed action," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 12(4), pages 309-325, November.

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    More about this item

    Keywords

    ancillary benefits; climate policy; coalition formation; game theory; impure public goods;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International 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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