Dynamic Games in the Economics and Management of Pollution

Jørgensen, Steffen; Martín‐Herrán, Guiomar; Zaccour, Georges

doi:10.1007/s10666-010-9221-7

Cited by 173 publications

(74 citation statements)

References 204 publications

(237 reference statements)

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“…9 We have checked the robustness of all these results when more than one myopic player acquires foresight. The sensitivity of the thresholds and s + to changes in the parameters is qualitatively similar, except for the number of foresight players, N .…”

Section: Mn Ssmentioning

confidence: 94%

“…An important feature of transboundary pollution games is that pollution emissions accumulate and therefore the action at any given moment has a lasting impact on the environment. The literature on dynamic pollution games (see Jørgensen et al (2010) for a survey of dynamic pollution games and Bertinelli et al (2014) and El Ouardighi et al (2016) for recent contributions to this literature) typically considers from the outset that all the players are farsighted, i.e., able to have an environmental policy to control their respective emissions. In this paper we consider two types of behavior: (i) a country can be myopic and adopt a "laisserfaire" policy which amounts, in our framework to ignore the impact of its current emissions on the accumulation of pollution and (ii) a country can be farsighted and is able to control its emissions taking into account the impact of its emissions on the pollution stock.…”

Section: Introductionmentioning

confidence: 99%

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The impact of foresight in a transboundary pollution game

Benchekroun

Martín‐Herrán

2016

European Journal of Operational Research

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We study the impact of foresight in a transboundary pollution game; i.e. the ability of a country to control its emissions taking into account the relationship between current emissions and future levels of pollution and thus on future damages. We show that when all countries are myopic, i.e., choose the 'laisser-faire' policy, their payoffs are smaller than when all countries are farsighted, i.e., non-myopic. However, in the case where one myopic country becomes farsighted we show that the welfare impact of foresight on that country is ambiguous. Foresight may be welfare reducing for the country that acquires it. This is due to the reaction of the other farsighted countries to that country's acquisition of foresight. The country that acquires foresight reduces its emissions while the other farsighted countries extend their emissions. The overall impact on total emissions is ambiguous. Moreover, our results suggest that incentive mechanisms, that involve a very small (possibly zero) present value of transfers, can play an important role in inducing a country to adopt a farsighted behavior and diminishing the number of myopic countries. These incentives would compensate the myopic country for the short-run losses incurred from the acquisition of foresight and can be reimbursed by that country from the gains from foresight that it enjoys in the long run. JEL Classification: C73, D90, Q59.

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Section: Mn Ssmentioning

confidence: 94%

Section: Introductionmentioning

confidence: 99%

The impact of foresight in a transboundary pollution game

Benchekroun

Martín‐Herrán

2016

European Journal of Operational Research

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“…7 See the surveys of dynamic pollutions games in Jorgensen, Martin-Herran and Zaccour (2010) or Long (2011).…”

Section: Introductionmentioning

confidence: 99%

Anticipated international environmental agreements

Açıkgöz

Benchekroun

2017

European Economic Review

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Anticipated International Environmental Agreements AbstractConsider a situation in which countries anticipate an international environmental agreement (IEA) to be in effect sometime in the future. What is the impact of the future IEA on current emissions after its announcement? We show that the answer to this question is ambiguous. We examine four types of IEAs that aim to reduce pollution stock in the environment. IEA type 1 sets a level of emissions, IEA type 2 and IEA type 3 set a percentage and a uniform cut vis-à-vis the business-as-usual policy respectively. IEA type 4 sets the policy that maximizes future joint benefits of the signatories. We show that all of these agreements reach their goal in the long run, but the intended benefits of these IEAs can potentially be offset by the anticipatory noncooperative response of the signatories, leading to an environmental degradation in the short run. Which IEA is preferable depends on the targeted level emissions during the phase of cooperation. When this target is above a certain threshold, welfare under IEA type 1 is larger than under IEA type 2 which is larger than under IEA type 3. Moreover, the highest level of welfare that can be attained under IEA type 1 is above the highest level of welfare achieved by any one of the other three IEAs.JEL-Codes: Q530, Q540, Q580, Q590.

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“…Specific to climate change, many researchers have looked at finding ways to achieve the grand coalition to an international environmental agreement (IEA) (for a thorough review, see [10]). Overall, except in very specific cases (e.g.…”

Section: Introductionmentioning

confidence: 99%

Climate Coalitions and Punishments

Eyland¹

2017

TEL

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Studies that demonstrate that climate change is human induced are becoming more and more prevalent. Even though most world leaders are aware of this urgency and know that we must work at mitigating it quickly, little has been accomplished in terms of widespread participation in an International Environmental Agreement (IEA). The purpose of this paper is to create a link between studies on the use of border tax adjustments (BTAs) and coalition formation. The main contribution is that the punishment will be based on relative emissions between signatories and defectors. It is a structure that is more likely be accepted by the World Trade Organization (WTO) since it may be seen as fair due to the fact that if signatories and defectors emit the same amount of pollution then there will be no punishment. The main results indicate that this form of punishment may lead to small, partial, or full cooperation, depending on the parameter values. Additionally, at any equilibrium level, the signatories have a punishment structure that induces defectors to reduce their emissions by the same amount. In the end, this punishment may be seen as a credible threat because at equilibrium no punishment is imposed, yet if we remove the possibility of punishment it breaks down to a situation wherein no large coalitions are feasible.

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Dynamic Games in the Economics and Management of Pollution

Abstract: The paper provides a survey of the literature which utilizes dynamic state-space games to formulate and analyze intertemporal, many decision-maker problems in the economics and management of pollution.

Cited by 173 publications

References 204 publications

The impact of foresight in a transboundary pollution game

The impact of foresight in a transboundary pollution game

Anticipated international environmental agreements

Climate Coalitions and Punishments

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