Voting in International Environmental Agreements - Experimental Evidence from the Lab

The management of global environmental resources, such as the global climate, requires cooperation between countries. In practice, countries willing to abate the emission of a pollutant that damages a shared environmental resource often cooperate in international environmental agreements (IEA). The essential feature of IEAs is that they must be self-enforcing because sovereign countries cannot be forced to sign an IEA. The theoretical literature on self-enforcing IEAs derives rather pessimistic predictions. If potential cooperative efficiency gains, and thereby free-riding incentives, are large, a self-enforcing IEA can attract only few signatories and marginally improve upon the non-cooperative outcome. Efficiency gains may be possible if an IEA does not require the collectively optimal abatement level from its signatories and thereby appeals to more participants. The theoretical literature, however, has not paid so much attention to the question how signatories determine their pollution abatement level. Also, the experimental literature on coalition formation which is still at the beginning does not explicitly consider the negotiation process. Most experiments prompt the signatories to abate the optimal amount. The present paper tries to narrow this gap. It experimentally analyses the effects if signatories to an IEA apply different voting schemes to determine the terms of agreement. To this end, unanimity, qualified majority voting, and simple majority voting are compared with respect to the resulting pollution abatement level and social welfare. At first sight in line with theoretical predictions, the experiment shows that a change of the voting scheme implemented in an IEA does not significantly change social welfare. However, changing the majority required to determine the terms of an IEA alters the 'depth and breadth' of cooperation. The coalitions under the unanimity rule are relatively large and implement moderate effort levels while the coalitions with majority votes implement very high effort levels but attract only few participants.

Dannenberg, Astrid (2010), Voting in International Environmental Agreements - Experimental Evidence from the Lab, ZEW Discussion Paper No. 10-072, Mannheim.