Environmental and Resource Economics

, Volume 62, Issue 4, pp 711–727 | Cite as

Minimum Participation Rules with Heterogeneous Countries

  • Hans-Peter WeikardEmail author
  • Leo Wangler
  • Andreas Freytag


Almost all international environmental agreements include a minimum participation rule. Under such rule an agreement becomes legally binding if and only if a certain threshold in terms of membership or contribution is reached. We analyse a cartel game with open membership and heterogeneous countries to study the endogenous choice of a minimum participation rule and its role for the success of international environmental agreements. While a full participation requirement would be efficient, we find (sequential) equilibria with a minimum participation rule that allows at least one country to free ride. Free riding may occur if a country can exploit some bargaining power in the negotiation of the minimum participation rule.


Minimum participation rules International environmental agreements Coalition formation Transboundary pollution Environmental policy coordination 

JEL Classification

D62 H41 D02 C72 



We dedicate this article to the memory of Mika Widgrén. Mika has provided stimulating comments on an earlier version this paper just a few weeks before he passed away. The paper has further benefitted from suggestions by Erik Ansink, Michael Finus and three anonymous reviewers. We thank the German Science Foundation (DFG) for supporting our research cooperation.


  1. Admati AR, Perry M (1991) Joint projects without commitment. Rev Econ Stud 58:259–276CrossRefGoogle Scholar
  2. Bagnoli M, Lipman BL (1989) Provision of public goods: fully implementing the core through private contributions. Rev Econ Stud 56:538–601CrossRefGoogle Scholar
  3. Barrett S (1994) Self-enforcing international environmental agreements. Oxf Econ Pap 46:878–894Google Scholar
  4. Barrett S (2003) Environment and statecraft. Oxford University Press, OxfordCrossRefGoogle Scholar
  5. Barrett S (2007) Why cooperate? The incentive to supply global public goods. Oxford University Press, OxfordCrossRefGoogle Scholar
  6. Barrett S (2009) Rethinking global climate change governance. Economics 3:1–12Google Scholar
  7. Bernheim BD, Peleg B (1987) Coalition-proof nash equilibria I. Concepts. J Econ Theory 42:1–12CrossRefGoogle Scholar
  8. Black J, Levi M, de Meza D (1993) Creating a good atmosphere: minimum participation for tackling the ’greenhouse effect’. Economica 60(239):281–293CrossRefGoogle Scholar
  9. Boadway R, Song Z, Tremblay J-F (2011) The efficiency of voluntary pollution abatement when countries can commit. Eur J Polit Econ 27:352–368CrossRefGoogle Scholar
  10. Böhringer C, Vogt C (2004) The dismantling of a breakthrough: the Kyoto Protocol as symbolic policy. Eur J Polit Econ 20(3):597–617CrossRefGoogle Scholar
  11. Brandt US (2002) Actions prior to entering an international environmental agreement. J Inst Theor Econ 158(4):695–712CrossRefGoogle Scholar
  12. Caparrós A, Pereau J-C (2004) North-south climate change negotiations: a sequential game with asymmetric information. Pub Choice 121(3–4):455–480CrossRefGoogle Scholar
  13. Carraro C, Eyckmans J, Finus M (2006) Optimal transfers and participation decisions in international environmental agreements. Rev Int Organ 1:379–396CrossRefGoogle Scholar
  14. Carraro C, Marchiori C (2003) Stable coalitions. In: Carraro C (ed) The endogenous formation of economic coalitions. Edward Elgar, Cheltenham, pp 156–198CrossRefGoogle Scholar
  15. Carraro C, Siniscalco D (1993) Strategies for the international protection of the environment. J Pub Econ 52(3):309–328CrossRefGoogle Scholar
  16. Carraro C, Marchiori C, Oreffice S (2009) Endogenous minimum participation in international environmental treaties. Environ Resour Econ 42:411–425CrossRefGoogle Scholar
  17. Chander P, Tulkens H (1995) A core-theoretic solution for the design of cooperative agreements on transfrontier pollution. Int Tax Pub Finance 2:279–293CrossRefGoogle Scholar
  18. Chander P, Tulkens H (1997) The core of an economy with multilateral environmental externalities. Int J Game Theory 26:379–401CrossRefGoogle Scholar
  19. Courtois P, Haeringer G (2012) Environmental cooperation: ratifying second best agreements. Pub Choice 151:565–584CrossRefGoogle Scholar
  20. d’Aspremont C, Jaquemin A, Gabszewicz J (1983) On the stability of collusive price leadership. Can J Econ 16:17–25CrossRefGoogle Scholar
  21. Dagoumas S, Papagiannis K, Dokopoulos S (2006) An economic assessment of the Kyoto Protocol application. Energy Policy 34(1):26–39CrossRefGoogle Scholar
  22. Diamantoudi E, Sartzetakis ES (2006) Stable international environmental agreements: an analytical approach. J Pub Econ Theory 8(2):247–263CrossRefGoogle Scholar
  23. Dietz S, Marchiori C, Tavoni A (2012) Domestic politics and the formation of international environmental agreements. Grantham Research Institute on Climate Change and the Environment Working Paper 76Google Scholar
  24. Eyckmans J, Finus M (2004) An almost ideal sharing scheme for coalition games with externalities. Katholieke Universiteit Leuven, Center for Economic Studies, Working paper 2004–2014Google Scholar
  25. Finus M (2003) Stability and design of international environmental agreements: the case of transboundary pollution. In: Folmer H, Tietenberg T (eds) International yearbook of environmental and resource economics, 2002/2003. Edward Elgar, Cheltenham, pp 82–158Google Scholar
  26. Finus M (2008) Game theoretic research on the design of international environmental agreements: insights, critical remarks and future challenges. Int Rev Environ Resour Econ 2:29–67CrossRefGoogle Scholar
  27. Finus M, Pintassilgo P (2013) The role of uncertainty and learning for the success of international climate agreements. J Pub Econ 103:20–43CrossRefGoogle Scholar
  28. Folmer H, von Mouche P (2000) Transboundary pollution and international cooperation. In: Tietenberg T, Folmer H (eds) The international yearbook of environmental and resource economics 2000/2001. Edward Elgar, Cheltenham, pp 231–266Google Scholar
  29. Fuentes-Albero C, Rubio SJ (2010) Can the international environmental cooperation be bought? Eur J Oper Res 202(1):255–264CrossRefGoogle Scholar
  30. Grüning C, Peters W (2010) Can justice and fairness enlarge international environmental agreements? Games 1(2):137–158CrossRefGoogle Scholar
  31. Hafalir I (2007) Efficiency in coalition games with externalities. Games Econ Behav 61(2):242–258CrossRefGoogle Scholar
  32. Harstad B (2006) Flexible integration? Mandatory and minimum participation rules. Scand J Econ 108(4):683–702CrossRefGoogle Scholar
  33. Hoel M (1992) International environment conventions: the case of uniform reductions of emissions. Environ Resour Econ 2(2):141–159Google Scholar
  34. IPCC (2007) International Panel on Climate Change, 30 April-4 May 2007: Mitigation of climate change—Summary for policymakers.
  35. Kolstad CD (2007) Systematic uncertainty in self-enforcing international environmental agreements. J Environ Econ Manag 53:68–79CrossRefGoogle Scholar
  36. Kreps DM, Wilson R (1982) Sequential equilibria. Econometrica 50:863–894CrossRefGoogle Scholar
  37. Lessman K, Edenhofer O (2011) Research cooperation and international standards in a model of coalition stability. Resour Energy Econ 33(1):36–54CrossRefGoogle Scholar
  38. McEvoy D, Stranlund J (2009) Self-enforcing international environmental agreements with costly monitoring for compliance. Environ Resour Econ 42:491–508CrossRefGoogle Scholar
  39. McGinty M (2007) International environmental agreements among asymmetric nations. Oxf Econ Pap 59:45–62CrossRefGoogle Scholar
  40. McGinty M (2011) A risk-dominant allocation: maximizing coalition stability. J Pub Econ Theory 13(2):311–325CrossRefGoogle Scholar
  41. Nagashima M, van Dellink R, Ierland E, Weikard H-P (2009) Stability of international climate coalitions—a comparison of transfer schemes. Ecol Econ 68(5):1476–1487Google Scholar
  42. Okada A (1993) The possibility of cooperation in an n-person prisoners’ dilemma with institutional arrangements. Pub Choice 77:629–656CrossRefGoogle Scholar
  43. Ostrom E (1986) An agenda for the study of institutions. Pub Choice 48:3–25CrossRefGoogle Scholar
  44. Ostrom E (1990) Governing the commons. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  45. Rubio SJ, Casino B (2005) Self-enforcing international environmental agreements with a stock pollutant. Span Econ Rev 7:89–109CrossRefGoogle Scholar
  46. Rutz S (2001) Minimum participation rules and the effectiveness of multilateral environmental agreements. Working paper 01/22, Centre for Economic Research, SFIT, ZürichGoogle Scholar
  47. Stern N et al (2007) The economics of climate ahange: the Stern review. Cambridge University Press, CambridgeGoogle Scholar
  48. Ulph A (2004) Stable international environmental agreements with a stock pollutant, uncertainty and learning. J Risk Uncertain 29(1):53–73CrossRefGoogle Scholar
  49. UN (1992) United Nations Framework Convention on Climate Change.
  50. UNFCCC (1998) Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNEP/INC/98/2, Information Unit for Conventions, UNEP, Geneva, 1998).
  51. Wangler L, Altamirano-Cabrera J-C, Weikard H-P (2013) The political economy of international environmental agreements: a survey. Int Environ Agreem Polit Law Econ 13:387–403Google Scholar
  52. Weikard H-P (2009) Cartel atability under an optimal aharing rule. Manch Sch 77:599–617CrossRefGoogle Scholar
  53. Weikard H-P, Dellink R (2014) Sticks and carrots for the design of international climate agreements with renegotiations. Ann Oper Res 220(1):49–68CrossRefGoogle Scholar
  54. Weikard H-P, Finus M, Altamirano-Cabrera J-C (2006) The impact of aurplus sharing on the stability of international climate agreements. Oxf Econ Pap 58:209–232Google Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  • Hans-Peter Weikard
    • 1
    Email author
  • Leo Wangler
    • 2
  • Andreas Freytag
    • 3
    • 4
  1. 1.Department of Social Sciences, Wageningen School of Social SciencesWageningen UniversityWageningenThe Netherlands
  2. 2.Institut für Innovation und Technik (iit)BerlinGermany
  3. 3.Department of EconomicsFriedrich Schiller University JenaJenaGermany
  4. 4.Department of EconomicsStellenbosch UniversityStellenboschSouth Africa

Personalised recommendations