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A two-level dynamic game of carbon emission trading between Russia, China, and Annex B countries

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  • Bernard, A.
  • Haurie, A.
  • Vielle, M.
  • Viguier, L.

Abstract

This paper proposes a computable dynamic game model of the strategic competition between Russia and developing countries (DCs), mainly represented by China, on the international market of emission permits created by the Kyoto Protocol. The model uses a formulation of (i) a demand function for permits from Annex B countries and (ii) marginal abatement costs (MAC) in Russia and China provided by two detailed models. GEMINI-E3 is a computable general equilibrium model that provides the data to estimate Annex B demand for permits and MACs in Russia. POLES is a partial equilibrium model that is used to obtain MAC curves for China. The competitive scenario is compared with a monopoly situation where only Russia is allowed to play strategically. The impact of allowing DCs to intervene on the international emission trading market is thus assessed.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 32 (2008)
Issue (Month): 6 (June)
Pages: 1830-1856

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Handle: RePEc:eee:dyncon:v:32:y:2008:i:6:p:1830-1856

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Cited by:
  1. Wu, Pei-Ing & Chen, Chai Tzu & Cheng, Pei-Ching & Liou, Je-Liang, 2014. "Climate game analyses for CO2 emission trading among various world organizations," Economic Modelling, Elsevier, vol. 36(C), pages 441-446.
  2. Othman, M.R. & Martunus & Zakaria, R. & Fernando, W.J.N., 2009. "Strategic planning on carbon capture from coal fired plants in Malaysia and Indonesia: A review," Energy Policy, Elsevier, vol. 37(5), pages 1718-1735, May.
  3. Paulus, Moritz, 2012. "How are investment decisions in the steam coal market affected by demand uncertainty and buyer-side market power?," EWI Working Papers 2012-3, Energiewirtschaftliches Institut an der Universitaet zu Koeln.
  4. Ngo Van Long & Stephanie F. McWhinnie, 2010. "The Tragedy of the Commons in a Fishery when Relative Performance Matters," School of Economics Working Papers 2010-07, University of Adelaide, School of Economics.
  5. Laurent Drouet & Alain Haurie & Francesco Moresino & Jean-Philippe Vial & Marc Vielle & Laurent Viguier, 2008. "An oracle based method to compute a coupled equilibrium in a model of international climate policy," Computational Management Science, Springer, vol. 5(1), pages 119-140, February.
  6. Zhu, Y. & Li, Y.P. & Huang, G.H., 2013. "Planning carbon emission trading for Beijing's electric power systems under dual uncertainties," Renewable and Sustainable Energy Reviews, Elsevier, vol. 23(C), pages 113-128.

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