STRATEGIES FOR THE INTERNATIONAL PROTECTION OF THE ENVIRONMENT

This paper analyses profitability and stability of international agreements to protect the environment in the presence of trans-frontier or global pollution, Each country decides whether or not to coordinate its strategy with other countries. A coalition is formed when conditions of profitability and stability (no free-riding) are satisfied. It is shown that such coalitions exist; that they tend to involve a fraction of negotiating countries; and that the number of signatory countries can be increased by means of self-financed transfers. However, expanding coalitions requires some form of commitment. Such schemes of commitment and transfers can even lead to cooperation by all countries.