Enforcing compliance with international environmental agreements using a deposit-refund system
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Enforcing compliance with international environmental agreements using a deposit-refund system David M. McEvoy
Accepted: 9 February 2013 / Published online: 23 February 2013 Springer Science+Business Media Dordrecht 2013
Abstract Whether nations are able to cooperatively manage shared resources through international environmental agreements (IEAs) depends on whether compliance with voluntary commitments can be enforced. Given that nations are sovereign enforcing compliance with IEAs cannot rely on the presence of a strong sanctioning body. Nonetheless, enforcement provisions must be effective in the sense that they will deter noncompliance and credible in the sense that they will actually be imposed. In this paper, we address the problem of enforcing compliance with IEAs by examining one promising mechanism—a deposit-refund system—that exhibits the necessary features for effective enforcement. We analyze a simple model to demonstrate the desirable properties of the mechanism and then consider the effects of imperfect monitoring, uncertainty, partial participation and reputation on the effectiveness of a deposit-refund system. Keywords International environmental agreements Enforcement Compliance Deposit-refund Abbreviations IEAs International environmental agreements GDP Gross domestic product SGP Stability and growth pact CFCs Chlorofluorocarbons CITES Convention on International Trade in Endangered Species MAC Marginal abatement cost UNFCCC United Nations Framework Convention on Climate Change
D. M. McEvoy (&) Economics Department, Appalachian State University, 3108 Raley Hall, 416 Howard Street, Boone, NC 28608, USA e-mail: [email protected]
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1 Introduction Whether nations can collectively manage shared natural and environmental resources through international environmental agreements (IEAs) depends largely on whether they can enforce compliance with their commitments. The present challenge of thwarting global climate change highlights this point very clearly. The Kyoto Protocol, currently the only binding agreement restricting greenhouse gas emissions, has been largely unsuccessful in part because the signatories to the agreement have little incentive to meet their individual emissions targets (Barrett 2008). While enforcement mechanisms are imperative for meaningful international cooperation, the nature of voluntary negotiations among sovereign states rules out more traditional regulatory approaches (e.g., emissions abatement mandates). Rather, provisions for enforcement must be decided collectively and, because of sovereignty, enforcing compliance cannot rely on the presence of a strong sanctioning body. Furthermore, the enforcement provisions need to be effective in the sense that they will be severe enough to deter non-compliance and credible in the sense that they will actually be imposed. In this paper we, address the problem of enforcing compliance with IEAs by examining one promising mechanism—a deposit-refund system—that appears to exhibit the necessary features fo
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