International Environmental Agreements: Is Global Cooperation Possible?

The negotiation and ratification of the Kyoto Protocol has spawned a body of literature aimed at analyzing the formation of international environmental coalitions. This literature suggests that in equilibrium environmental agreements will have only a small number of signatories. As of April 2007, however, 168 countries have ratified the protocol; thirty-five of which have binding emissions reduction requirements. These thirty-five parties represent a coalition significantly larger than that predicted by the existing coalition formation models. To understand this finding, this paper develops a new game-theoretic model of international coalition formation, altering the game presented in the literature. Using this model, we attempt to explain the outcome of the Kyoto Protocol. We then investigate a method of increasing participation in future international environmental agreements. Results from the model suggest that full cooperation is a possible equilibrium if the agreement is properly specified.