Bargaining over Global Public Goods

Ben Groom, J. Rupert Gatti, Timo Goeschl and Timothy Swanson

in Global Environmental Commons

Published in print July 2012 | ISBN: 9780199656202
Published online September 2012 | e-ISBN: 9780191742149 | DOI:
Bargaining over Global Public Goods

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Reaching international agreement on the provision of environmental goods is made more difficult when the parties negotiating are asymmetric in the extent of the public good they can provide and the benefits received. In such cases fairness is likely to be as important as efficiency for agreement to be reached. Here these issues are investigated in the context of biodiversity, which typifies this asymmetry. Using cooperative bargaining theory we show that agreements that are unfair are unlikely to be stable. For biodiversity the theory suggests that the current bargaining solution found in the Convention on Biodiversity (CBD) and incremental cost payments, may be unstable for these reasons. This finding is worrying given the destructible nature of biodiversity since the bargaining process may include threats of strategic destruction of these resources, as witnessed in recent bargaining strategies for biodiversity payments employed by Cameroon and Ecuador.

Keywords: cooperative bargaining; benefit sharing; North-South; strategic destruction; convention on biodiversity

Chapter.  15910 words.  Illustrated.

Subjects: Economic Development and Growth

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