We study a three-country model of international environmental agreements where countries may choose either to limit their emissions or to behave noncooperatively. First, we provide a taxonomy of various kinds of strategic situations. Then, by applying some recently developed game-theoretic...

Recent environmental economics literature regarding global problems, like for example those associated with greenhouse gases, focuses on the emergence of international co-operation and underlying incentives. International co-operation among countries is necessary in the case of global pollution,...