Impact of international lobby groups on international environmental agreements
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Impact of international lobby groups on international environmental agreements Peymaneh Safaynikoo1 · Mohammad Hossein Dehghani2 Received: 27 March 2020 / Accepted: 23 October 2020 © Society for Environmental Economics and Policy Studies and Springer Japan KK, part of Springer Nature 2020
Abstract Economists have long argued over the political economy of tradable emission permits, especially the political pressure of lobby groups on international environmental agreements. However, little attention has been paid to the effects of cross-national lobbying on this market. Here, we examine how an international lobby group can affect national and international climate policies concerning international market for emission permits. It extends the common agency model of policy-making to multiple-agency relationships in the context of international environment agreements. The main questions are (1) to what extent are governments’ rent-seeking incentives affected through international lobbying? (2) how do domestic and global emissions change in the presence of an international lobby group? We present a three-stage non-cooperative game in which international and national lobbies try to influence governments both when the governments decide on the formation of the international market and when each country chooses the number of permits. We find the condition under which the formation of an international lobby group can raise the contributions of national lobbies which support an international market and hence bring more benefits to the government. We also show that domestic and total emission levels not only depend on the aggregate levels of organized stakes in all countries but also on the distribution of stakes among individual lobby groups that form an international lobby group. Keywords International environmental agreements · An international lobby group · Political economy · Emissions trading
* Mohammad Hossein Dehghani [email protected] Peymaneh Safaynikoo [email protected] 1
Economics and Philosophy Group, EBS University of Business and Law, Rheingaustraße 1, Oestrich‑Winkel, Germany
2
Faculty of Economics, University of Tehran, N Kargar Ave, Tehran, Iran
13
Vol.:(0123456789)
Environmental Economics and Policy Studies
JEL classification D72 · F53 · Q54 Abbreviations GHG Green house gas IEA International environmental agreements
1 Introduction According to the Stern (2007) review on the economics of climate change, the global average temperature is estimated to increase over 2 °C by 2030 if greenhouse gas (GHG) emissions continue to rise at the present rate. Then, in the longer term, there will be a high chance of 5 °C increase in the average temperature. It will have dangerous effects on both the environment and human societies. This unavoidable global issue needs serious attention. A significant reduction of emissions of GHGs can be achieved only through international cooperation and participation of all countries. The historic Paris climate agreement is a serious step in international
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