Distribution of Potential Gains from International Environmental Agreements: The Case of the Greenhouse Effect

International negotations between countries will be needed to reach a Pareto efficient solution for global environmental problems such as the enhanced greenhouse effect. We try to quantify how the potential gains derived from cooperation would be distributed among countries. A weighted sum of all countries welfare functions is used as the global welfare function and three different cooperative solutions are considered: TheFirst Best(FB), theNash Bargaining(NB), and theKalai–Smorodinsky(KS). The main result obtained from the simulation of the theoretical model is that, although at the world level gains from cooperation are quite similar in all three cooperative solutions, distribution of these gains between countries is very different in the FB solution compared to the NB and the KS solutions.