Pushing the Tipping in International Environmental Agreements

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Working paper
Lorenzo Cerda Planas
Issue number: 
Documents de travail du Centre d'Economie de la Sorbonne
This paper intends to provide an alternative approach to the formation of International Environmental Agreements (IEA). The existing consensus within the literature is that there are either too few signatories or that the emissions of signatories are almost the same as business as usual (BAU). I start from a well-known model (Barrett 1997), adding heterogeneity in countries' marginal abatement costs (low and high) and in damages suffered (or corresponding environmental concern). I also allow for technological transfers and border taxes. I show that using either mechanism one at a time, does not change the results. But if both are used in a strategic manner, a grand (and abating) coalition can be reached, while minimizing transfers.
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