Definition Of Environmental Agreements

The signatories do not intend to abandon the IEA, as this results in a reduction – perhaps zero – and a lower expected net benefit (ex ante internal stability). Contrary to the „orthodox“ position on the commercial economy, we believe that trade policy, if used carefully, can contribute to the achievement of environmental objectives without undermining the international trading system. Section 3 examines the relative benefits of carbon taxes and a cap-and-trade system. We will then explain the effects of authorizing international trade in emission permits (section 4). Here are two types of situations. If the regions where trade takes place do not harmonise their policies, trade in permits can undermine environmental policy in one of the regions. The more favourable arguments in favour of trade in authorisations arise where the different regions harmonise their policies. But in this case too, trade in permits could increase or reduce incentives for a strict environmental policy. In other words, while trade in permits reduces mitigation costs, it does not necessarily increase the amount of the reduction balance. The trade in permits is not necessarily „environmentally friendly“.

We briefly examine the case where mitigation costs are changed with the trade regime; This possibility arises, for example, when the incentive to invest in mitigation capital depends on the possibility of negotiating authorisations. An international environmental agreement or, sometimes, an environmental protocol is a kind of legally binding treaty that allows them to achieve an environmental goal. .