Almost all international environmental agreements include a minimum participation rule. Under such rule an agreement becomes legally binding if and only if a certain threshold in terms of membership or contribution is reached. We analyse a cartel game with open membership and heterogeneous countries to study the endogenous choice of a minimum participation rule and its role for the success of international environmental agreements. While a full participation requirement would be efficient, we find (sequential) equilibria with a minimum participation rule that allows at least one country to free ride. Free riding may occur if a country can exploit some bargaining power in the negotiation of the minimum participation rule.
|Journal||Environmental and Resource Economics|
|Publication status||Published - 1 Dec 2015|
- Coalition formation
- Environmental policy coordination
- International environmental agreements
- Minimum participation rules
- Transboundary pollution