Equity preferences and abatement cost sharing in international environmental agreements

Abstract

This paper examines empirically the importance of equity preferences for the formation of international environmental agreements (IEA) for transboundary pollution control. Although it has been shown theoretically that the existence of equity preferences among countries considering an IEA increases the chances for formation and stability of a coalition, empirical assessments of such preferences have been limited to climate change mitigation and single-country studies. We consider the case of marine plastic pollution, of which a large share consists of food and beverage containers, representing a transboundary pollution control problem of increasing policy concern, with properties that lead to distinct considerations for equity and the sharing of abatement costs. We employ a coordinated choice experiment in the United Kingdom and United States to assess preferences for abatement-cost allocations in a marine plastics IEA. Pairs of cooperating countries and the relative allocation of abatement costs are varied experimentally. Results show systematic aversion to both advantageous and disadvantageous inequality with respect to abatement costs but also that the relative strength of advantageous and disadvantageous inequality aversion differs across countries. Across both countries, there is evidence that left-leaning voters generally favor more equal international sharing of abatement costs. Differences of these results from the case of greenhouse gas emission reduction, and implications for current efforts to establish a legally binding global treaty on marine plastic pollution, are discussed.