In this paper we examine the stability of international environmental agreements about a (common) emissions target. By signing the agreement, the parties develop a sense of responsibility to the commitment made, gaining a self-image that contributes to their utility.
We study a dynamic two-stage game where all countries act individualistically. We investigate how two fundamental components of the model, that is, the ambition of the pledge and the relative importance given to compliance to the commitment, affect the stability and efficiency of the agreement in terms of global welfare and total emissions.
We find that participation is the key driver of all the results and that it is negatively related to the ambition of the pledge and positively related to countries' level of concern about environmental issues.
Published August 2021 , 31 pages
G2147.pdf (2 MB)