Economic and environmental strategies against targeting energy subsidy in Iranian meat market: A game theory approach

This study sought to investigate the economic-environmental effects of Targeted Subsidy Policy on energy in the meat market of Iran within a game theory framework. The welfare of players in economic game, determined by equilibrium displacement model, and the environmental losses (benefits) from Greenhouse Gas emissions were considered as game payoffs based on the behavior of three players: producers, consumers, and government. Results show an increase in the piece of energy carriers as a policy deterred from enhancing environmental losses and reducing the welfare of each market player. Therefore, eliminating energy subsidy, and redistributing its revenue toward producers to improve technology are regarded as the government's strategy for economic-environmental equilibrium, while removing energy subsidy without repaying is considered as equilibrium strategy in which the effects of Targeted Subsidy Policy are only considered economically or environmentally. Finally, the effect of losses from Greenhouse Gas emissions, caused by increasing the production of livestock products, on reduced energy consumption related to each production unit in meat market was further compared with the positive effect of technology improvement. Therefore, shrinking government size beside its monitoring increase can play an effective role in improving the situation of the meat market.