The purpose of this article is to analyse whether the presence of surplus emission allowance trading jeopardizes the environmental target of an international environmental agreement. We argue that surplus emission allowance trading can be used as an implicit side-payment mechanism to actually...

CDM projects have large potentials but also face significant obstacles that have so far limited their applicability. Two serious problems that an effective contracting faces are the presence of private information and the lack of sufficiently precise output measures. In a principal-agent...

This paper considers a situation where a real risk exists that requires precautions, but the public mostly experiences the risk through infrequently occurring extreme events; this type of risk includes risk from climate change, international terrorism, natural calamities or financial crises. The...

This paper demonstrates how expectations about the design of regimes influence countries' actions before negotiating for agreements on international environmental problems. When a country is privately informed about own reduction costs, the preagreement emission level serves as a device to...