Economic Theories of International Environmental Cooperation

To deal effectively with transboundary environmental problems such as climate change, it is important to have an idea of the model for an 'efficient' and 'fair' policy. An understanding of the strategic interactions involved in the international decision-making process is also essential. Carsten Helm uses rigorous theoretical reasoning and applications to address these issues.The first part of the book contains a normative analysis based on fair division theory and welfare theory. The empirical focus is on burden sharing in the climate change regime, for which a concrete proposal is derived.The book then extends the perspective by taking into account the self-interest of sovereign states. Using cooperative game theory the potential for Pareto efficient cooperation is analysed.Finally, Carsten Helm applies non-cooperative game theory to analyse issues such as environmental and welfare effects of emissions trading, the misuse of scientific uncertainties as a bargaining tool and the effects of discontinuities in environmental systems on cooperation.This highly topical book will be of great interest to economists and political and environmental scientists, as well as all those involved in the policy and decision making of international environmental agreements.