Dynamic effects on the stability of international environmental agreements

In terms of the number of signatories, one observes both large and small international environmental agreements. The theoretical literature, based on game theory, discusses different concepts and mechanisms regarding stability of coalitions. The conclusion has been reached that in all circumstances, under farsightedness, both large and small stable coalitions can occur. This theory is based on behavioural reaction patterns but does not take account of the interaction with the dynamics of emission adjustments. This paper shows that when these two dynamical processes are integrated, large and small stable coalitions can still occur but only if the costs of emissions are relatively unimportant as compared with the costs of abatement.