Temporal flexibility of permit trading when pollutants are correlated

Legras, Sophie; Zaccour, Georges

doi:10.1016/j.automatica.2011.01.057

Cited by 12 publications

(9 citation statements)

References 19 publications

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“…14 13 The tradeo¤, in our damage function, between the levels of emission, E; and adaptation, a i ; is similar to that in the literature on multiple pollutants in the context of climate change, where some pollutants such as CO 2 increase global warming and others such as SO 2 have a cooling e¤ect (see, for example, Legras and Zaccour, 2011). 14 In our model, the net cost of adaptation is given by the cost function, C (a i ) ; less the bene…t from adaptation in terms of reduced damage, a i E: Thus, our net cost of adaptation is decreasing in the global emission level, E; for all > 0.…”

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confidence: 68%

Adaptation Effectiveness and Free-Riding Incentives in International Environmental Agreements

2011

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While an international agreement over the reduction of greenhouse gases (GHGs) emissions proves to be elusive, there is a large and growing support for investment in developing more e¤ective technologies to adapt to climate change. We show that an increase in e¤ectiveness of adaptation will diminish the incentive of individual countries to free-ride on a global agreement over emissions. Moreover, we show that this positive e¤ect of an increase in adaptation's e¤ectiveness can also be accompanied by an increase in the gains from global cooperation over GHGs emissions.JEL Classi…cations: Q54, Q59

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confidence: 68%

Adaptation Effectiveness and Free-Riding Incentives in International Environmental Agreements

2011

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“…Let us consider n countries, each of which produces an economic output qi, emits pollution xi and reduces it using a mitigation investment yi. Following other environmental games [18,25,27,28], we express the output qi in terms of the pollution xi as…”

Section: Modeling Frameworkmentioning

confidence: 99%

“…The choice of the benefit function should be theoretically and empirically grounded. Quadratic payoff functions are favorite in the game theory because they allow for finding analytic solutions in many cases [11,18,27,36]. However, the quadratic utility leads to increasing absolute risk aversion (which never happens in reality) and has never been seriously considered by economists.…”

Section: Modeling Frameworkmentioning

confidence: 99%

“…The models [5,12,15,16,26] rigorously analyze mitigation and adaptation actions in one country ignoring international aspect of the problem. A static game of [27] and a dynamic game of [28] include separate endogenous mitigation variable, nevertheless, do not consider adaptation. Paper [11] analyzes a static game of n countries with pollution and adaptation but does not explicitly include mitigation.…”

Section: Introductionmentioning

confidence: 99%

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Games with Adaptation and Mitigation

Hritonenko

Yatsenko

2020

Games

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We formulate and study a nonlinear game of n symmetric countries that produce, pollute, and spend part of their revenue on pollution mitigation and environmental adaptation. The optimal emission, adaptation, and mitigation investments are analyzed in both Nash equilibrium and cooperative cases. Modeling assumptions and outcomes are compared to other publications in this fast-developing area of environmental economics. In particular, our analysis implies that: (a) mitigation is more effective than adaptation in a crowded multi-country world; (b) mitigation increases the effectiveness of adaptation; (c) the optimal ratio between mitigation and adaptation investments in the competitive case is larger for more productive countries and is smaller when more countries are involved in the game.

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“…The environmental economics [7,19,29] and environmental games [6,18] commonly use linear or quadratic payoff functions. We choose the linear payoff and costs c y y and c z z in (1) for analytic tractability and consistency with a dynamic model of Section 3.…”

Section: Static Optimization Of Mitigation and Adaptationmentioning

confidence: 99%

Mitigation vs. Adaptation: Analytic Models for Policy Assessment

Hritonenko

Yatsenko

2016

Environ Model Assess

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We suggest analytic economic-environmental models that aim to investigate the multi-faced interplay between economic production, industrial pollution, and environmental protection. The considered static and dynamic optimization problems assess a country's sustainable environmental policy that involves the optimal combination of adaptation and mitigation strategies. A qualitative analysis of obtained solutions leads to relevant conclusions about the ranges of economic-environmental parameters, in which the adaptation and mitigation are viable policy options.

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Temporal flexibility of permit trading when pollutants are correlated

Cited by 12 publications

References 19 publications

Adaptation Effectiveness and Free-Riding Incentives in International Environmental Agreements

Adaptation Effectiveness and Free-Riding Incentives in International Environmental Agreements

Games with Adaptation and Mitigation

Mitigation vs. Adaptation: Analytic Models for Policy Assessment

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