The effect of learning on membership and welfare in an International Environmental Agreement

摘要

Better information about the cost-benefit of abatement has an ambiguous effect on both the equilibrium membership and on aggregate welfare of an international environmental agreement. Previous papers claim that (complete) learning increases membership and decreases aggregate welfare. That claim is based on analysis of approximations to the relations between a damage parameter and membership and welfare. Those approximations have characteristics not shared by the functions they are intended to approximate, so conclusions based on the approximations are wrong. The correct result is that complete learning increases membership and welfare when the damage parameter is “very likely to be high” , and the reverse holds when the damage parameter is “very likely to be low”.