International Review of Environmental and Resource Economics > Vol 6 > Issue 4

Dynamic Models of International Environmental Agreements: A Differential Game Approach

Emilio Calvo, Department of Economic Analysis and ERICES, University of Valencia, Spain, Santiago J. Rubio, Department of Economic Analysis and ERICES, University of Valencia, Spain, santiago.rubio@uv.es
 
Suggested Citation
Emilio Calvo and Santiago J. Rubio (2013), "Dynamic Models of International Environmental Agreements: A Differential Game Approach", International Review of Environmental and Resource Economics: Vol. 6: No. 4, pp 289-339. http://dx.doi.org/10.1561/101.00000053

Published: 09 Apr 2013
© 2013 E. Calvo and S. J. Rubio
 
Subjects
Environmental Economics
 
Keywords
C73D62H41Q50
ExternalitiesPublic goodsPollutionInternational environmental agreementsState-space dynamic gamesDifferential gamesCooperative and noncooperative gamesTrigger strategies
 

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In this article:
1 Introduction
2 The Basic Model: A Differential Game of International Pollution Control
3 Self-Enforcing IEAs with a Stock Pollutant: Cooperation with Binding Agreements
4 IEAs Supported by Trigger Strategies: Cooperation without Binding Agreements
5 Cooperative IEAs Sustained by Transfers
6 Conclusions
References

Abstract

This article provides a survey of dynamic models of international environmental agreements (IEAs). The focus is on environmental problems that are caused by a stock pollutant as are the cases of the acid rain and climate change. For this reason, the survey only reviews the literature that utilizes dynamic state-space games to analyze the formation of international agreements to control pollution. The survey considers both the cooperative approach and the noncooperative approach. In the case of the latter, the survey distinguishes between the models that assume binding agreements and those that assume the contrary. An evaluation of the state of the art is presented in the conclusions along with suggestions for future research.

DOI:10.1561/101.00000053