An Evolutionary approach to International Environmental Agreements

Our work contributes to explain the observation of two facts at odds: the number of signatories of international environmental agreements (IEA) has grown in time, meanwhile, the aggregate global level of greenhouse gas emissions is increasing at an exponential rate. We introduce a novel multi-scale framework, composed by two tied games, to show under which conditions a country is able to full the IEA: an Evolutionary Game which describes the economic structure through the interaction of households and firms' strategies; and a 2x2 one-shot Game, with asymmetric nations that negotiate on the maximum share of emissions. The distance between international environmental targets and country's emissions performances is explained in terms of heterogeneous economic structure, without the need to impose any free-riding behaviour. Consumer's environmental consciousness (micro level) together with global income (and technological) inequality (macro level), are found to be the key variables towards the green transition path. We provide analytical results paired with numerical simulations.