A dynamic analysis of international environmental agreements under partial cooperation

We study the dynamics of equilibrium participation in an international environmental agreement aimed at increasing the stock of a global public good such as climate change mitigation. In contrast with previous studies, we assume partial cooperation among signatories and show that the coalition size can be large and increase over time, even when the initial coalition size is small. We highlight a novel trade-off between agreements that are narrow-but-deep-and-long-lived and those that are broad-but-shallow-and-short-lived. Our results show that loose cooperative agreements, which are broad-but-shallow-and-short-lived, are both welfare- and Pareto-superior to tight cooperative agreements, which are narrow-but-deep-and-long-lived. We also show that conditions exist under which the equilibrium coalition size is efficient.