International Environmental Agreements with reference points

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

Abstract

Whether or not the current climate talks achieve a meaningful treaty, the current negotiation forms important reference points for future negotiations. In this paper, we introduce reference points to a canonical model of International Environmental Agreements (IEAs). Countries have reference points on IEA membership. An IEA member that abates is aggrieved if there is a material loss relative to the case with the referenced membership. We find that reference points weakly reduce the abatement level for an IEA with given membership, while interestingly, reference points weakly increase the equilibrium membership and thus the equilibrium abatement level of the IEA. These results imply that effective management of reference points could be conducive to the resolution of the climate problem.
Original languageEnglish
Pages (from-to)68-73
Number of pages6
JournalJournal of Behavioral and Experimental Economics
Volume59
Early online date22 Oct 2015
DOIs
Publication statusPublished - Dec 2015
Externally publishedYes

Fingerprint

Negotiating
Climate
International Cooperation
climate
treaty
International environmental agreements
Reference point
management

Keywords

  • International Environmental Agreements
  • Reference points

Cite this

@article{67c1940ed7a944588d42fee7531dc358,
title = "International Environmental Agreements with reference points",
abstract = "Whether or not the current climate talks achieve a meaningful treaty, the current negotiation forms important reference points for future negotiations. In this paper, we introduce reference points to a canonical model of International Environmental Agreements (IEAs). Countries have reference points on IEA membership. An IEA member that abates is aggrieved if there is a material loss relative to the case with the referenced membership. We find that reference points weakly reduce the abatement level for an IEA with given membership, while interestingly, reference points weakly increase the equilibrium membership and thus the equilibrium abatement level of the IEA. These results imply that effective management of reference points could be conducive to the resolution of the climate problem.",
keywords = "International Environmental Agreements, Reference points",
author = "Fuhai HONG",
year = "2015",
month = "12",
doi = "10.1016/j.socec.2015.10.004",
language = "English",
volume = "59",
pages = "68--73",
journal = "Journal of Behavioral and Experimental Economics",
issn = "2214-8043",
publisher = "Elsevier Inc.",

}

International Environmental Agreements with reference points. / HONG, Fuhai.

In: Journal of Behavioral and Experimental Economics, Vol. 59, 12.2015, p. 68-73.

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

TY - JOUR

T1 - International Environmental Agreements with reference points

AU - HONG, Fuhai

PY - 2015/12

Y1 - 2015/12

N2 - Whether or not the current climate talks achieve a meaningful treaty, the current negotiation forms important reference points for future negotiations. In this paper, we introduce reference points to a canonical model of International Environmental Agreements (IEAs). Countries have reference points on IEA membership. An IEA member that abates is aggrieved if there is a material loss relative to the case with the referenced membership. We find that reference points weakly reduce the abatement level for an IEA with given membership, while interestingly, reference points weakly increase the equilibrium membership and thus the equilibrium abatement level of the IEA. These results imply that effective management of reference points could be conducive to the resolution of the climate problem.

AB - Whether or not the current climate talks achieve a meaningful treaty, the current negotiation forms important reference points for future negotiations. In this paper, we introduce reference points to a canonical model of International Environmental Agreements (IEAs). Countries have reference points on IEA membership. An IEA member that abates is aggrieved if there is a material loss relative to the case with the referenced membership. We find that reference points weakly reduce the abatement level for an IEA with given membership, while interestingly, reference points weakly increase the equilibrium membership and thus the equilibrium abatement level of the IEA. These results imply that effective management of reference points could be conducive to the resolution of the climate problem.

KW - International Environmental Agreements

KW - Reference points

UR - http://commons.ln.edu.hk/sw_master/5954

UR - http://www.scopus.com/inward/record.url?scp=84945314877&partnerID=8YFLogxK

U2 - 10.1016/j.socec.2015.10.004

DO - 10.1016/j.socec.2015.10.004

M3 - Journal Article (refereed)

VL - 59

SP - 68

EP - 73

JO - Journal of Behavioral and Experimental Economics

JF - Journal of Behavioral and Experimental Economics

SN - 2214-8043

ER -