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Impacts of Trade and the Environment on Clustered Multilateral Environmental Agreements

Authors

  • Peter H. Egger,

    1. KOF, ETH Zurich, CEPR, WIFO, CESifo, Center for Taxation Said Business School, University of Oxford, Oxford, UK
    2. Centre for Globalisation and Economic Policy, University of Nottingham, Nottingham, UK
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  • Christoph Jessberger,

    1. Bauhaus Luftfahrt e.V., Munich, Germany
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  • Mario Larch

    1. Centre for Globalisation and Economic Policy, University of Nottingham, Nottingham, UK
    2. Ifo Institute for Economic Research, CESifo, University of Bayreuth, Bayreuth, Germany
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  • The authors gratefully acknowledge the comments of an anonymous reviewer on an earlier version of the manuscript. Egger acknowledges financial support from the Swiss Bundesamt für Energie.

Abstract

Many countries align their environmental policy and environmental regulation by way of multilateral environmental agreements (MEAs). Previous work in economics provided insights in the economic and political determinants of MEAs at large. This paper distinguishes MEAs by the main issues covered and classifies them in five clusters: biodiversity; atmosphere; land; chemicals and hazardous wastes; and seas. Then the role of environmental, economic, and political factors and of dynamic and cross-cluster effects is studied at the level of MEA clusters. Two findings stand out from this empirical analysis. First, economic size and multilateral trade liberalisation of countries are found to be the most important drivers of MEA participation across all clusters. Second, adjustment costs turn out to deter and, in particular, cross-cluster spillovers turn out to stimulate MEA participation across countries and clusters.

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