موافقت نامه های زیست محیطی خود اجرای و تحرک سرمایه
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|27957||2014||13 صفحه PDF||سفارش دهید||محاسبه نشده|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Regional Science and Urban Economics, Volume 48, September 2014, Pages 120–132
In a multi-country model with mobile capital and global pollution this paper analyzes self-enforcing environmental agreements (IEAs) when the coalition formed by the signatory countries plays Nash. In accordance with a previous environmental literature we show that there exists a unique self-enforcing IEA consisting of two or three signatory countries if emission tax rates are strategic substitutes. However, emission tax rates are strategic complements if the pollution is not too detrimental. In that case we find very small self-enforcing IEAs, as before, but now the socially optimal agreement among all countries may be self-enforcing as well. Special emphasis is placed on the investigation and interpretation of the conditions which render stable the grand coalition.
Fighting climate change effectively requires the massive reduction of carbon emissions at the global scale that cannot be achieved without an encompassing international environmental agreement (IEA). The progress made over the last decades in international negotiations towards such an agreement is so small that prospects are bleak for stabilizing the world climate at safe levels. That calls for further efforts to investigate the conditions for the successful formation of an effective IEA. The challenge is to establish an IEA that overcomes the sovereign countries' reluctance to join an IEA unless it is in their self-interest. In other words, an IEA must be self-enforcing in the sense that no signatory has an incentive to leave the IEA and no non-signatory has an incentive to join it. Among the early contributions to an economic literature on IEAs based on that concept of self-enforcement are Carraro and Siniscalco (1991), Hoel (1992), and Barrett (1994). The working-horse model is a simple static model of identical countries without international trade. Some studies model climate coalitions1 as Stackelberg leaders (e.g. Barrett, 1994, Diamantoudi and Sartzetakis, 2006 and Rubio and Ulph, 2006) and others portray them as Nash players along with all non-signatories (e.g. Carraro and Siniscalco, 1991, Hoel, 1992, Finus, 2001 and Rübbelke and Finus, 2013). In both variants of the basic model of the IEA literature the overall conclusion is that due to strong free-rider incentives large coalitions are unstable such that large potential gains from cooperation remain unexploited. In order to find out whether the prospects of reaching an effective IEA enhance in more structured models, Eichner and Pethig, 2012 and Eichner and Pethig, 2013 extend the basic model of coalition formation by explicitly modeling production, consumption and international trade in fossil fuels and a composite consumption good. When the coalition is assumed to be the Stackelberg leader (Eichner and Pethig, 2013), stable coalitions turn out to comprise up to 60% of all countries. But unfortunately, such coalitions hardly reduce climate damage below its level in the non-cooperative scenario — regardless of how large they are. When the coalition plays Nash along with all fringe countries (Eichner and Pethig, 2012), stable conditions are both small and ineffective similar as in the basic model without trade. The present paper also analyzes the formation of a climate coalition in a world economy with international trade, but in contrast to Eichner and Pethig, 2012 and Eichner and Pethig, 2013 our focus is now on capital mobility and capital-related global pollution. That means, we take as our point of departure the branch of the fiscal federalism literature dealing with decentralized policymaking in an economy with spillovers among jurisdictions. In their seminal paper Oates and Schwab (1988) argue that the choice of capital taxes and environmental standards is efficient in an economy with identical jurisdictions, mobile capital and local pollution.2Ogawa and Wildasin (2009) extend the analysis to account for transboundary pollution (spillovers) and asymmetric countries, and still get efficient capital tax rates. Eichner and Runkel (2012) point out that it is the zero capital supply elasticity which drives Ogawa and Wildasin's result. They adopt a two-period framework employed e.g. by Bucovetsky and Wilson (1991) and Keen and Kotsogiannis (2002) and show that in case of strictly positive capital supply elasticities capital tax rates are inefficiently low in the decentralized equilibrium because the jurisdictions' choice of capital taxes is then distorted by their incentive for tax competition and their disregard of spillover effects.3 Ogawa and Wildasin (2009) and Eichner and Runkel (2012) investigate the (in)efficiency of capital tax competition in the presence of transboundary pollution when decision-making is decentralized, i.e. when all jurisdictions/countries act non-cooperatively. Here we will take up the analytical framework of Eichner and Runkel (2012) with some minor simplifications4 to investigate the formation of stable coalitions when the fringe countries as well as the coalition play Nash. Although our approach shares with Eichner and Pethig (2012) both Nash behaviors on the part of the coalition and international trade, the pertaining models differ significantly. In Eichner and Pethig's one-period model there are world markets for a composite consumption good and fossil fuels; fuels are extracted and consumed by the countries' residents along with a consumption good that is produced without using fuel as an input. In contrast, following Eichner and Runkel (2012) we now model world markets for capital and a composite consumption good in the second period, and capital is an intermediate good in the production of the consumption good. As reported above, Eichner and Pethig (2012) found no stable coalitions consisting of three or more countries. Similarly, in the present paper we will demonstrate that there exist small stable coalitions with two or three member countries. However, for a smaller but non-empty subset of parameter values the grand coalition turns out to be also stable. In other words, full cooperation of all countries may be self-enforcing. The crucial necessary condition for this unexpected result are economies (= parameter constellations) in which emission tax rates are strategic complements. For given preferences and technologies strategic complementarity of taxes and stable grand coalitions is the more likely, the smaller the total number of countries, the less severe the climate damage of emissions and the smaller the flow of emissions. The paper is organized as follows. Section 2 introduces and describes the formal model and briefly characterizes the benchmark scenarios of global non-cooperation and social optimum. Section 3 analyzes the impact of climate coalitions of different but exogenously given sizes and investigates analytically and numerically economies in which emission tax rates are either strategic complements or strategic substitutes. Section 4 then turns to the existence and size of self-enforcing IEAs emphasizing the conditions under which the grand coalition is stable. Section 5 concludes.