Edited by Jeroen C.J.M. van den Bergh
Chapter 31: Environmental Conflict, Bargaining and Cooperation
Carlo Carraro' 1. Background Most of the new environmental phenomena have an intrinsic international dimension due to transnational or global spillovers. The depletion of the ozone layer and climate change depend on global aggregate emissions. Acid depositions and marine pollution usually cross the borders of the polluting country. Even deforestation is an international problem as forests are a sink for CO, and provide important support for biodiversity. The international dimension of the environment is a source of substantial interdependence among nations: each country benefits from using the environment as a receptacle of emissions and is damaged by environmental deterioration. While the benefit for any country is primarily related to domestic pollution alone, the environmental damage is related to both domestic and foreign emissions. This problem is not new to economists, and has been analysed in the area of externalitiesand public goods. What is new is the context where these problems take place. Currently, the atmosphere and the waters are managed as global common-property goods, and there is no institution which possesses powers to regulate their use by means of supranational legislation, economic instruments, or by imposing a system of global property rights. Hence the difficulty in achieving large environmental agreements and the necessity to design negotiation mechanisms leading to self-enforcing outcomes. Environmental agreements among sovereign countries have been widely advocated and debated in the last few years, following the Montreal Protocol on CFCs (chlorofluorocarbons), to protect the ozone layer, and the UN Conference on the Environment and Development, organized in...
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