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The Acid Rain Differential Game

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Author Info

  • Karl-Göran Mäler
  • Aart De Zeeuw

    ()

Abstract

This paper considers an acid rain differential game. Countries emit sulphur which is partly transferred to other countries. Depositions above critical loads ultimately destroy the soil. Countries face a trade-off between the costs of emission reductions and the damage to the soil due to the depletion of the acid buffers. Because of the transboundary externalities the outcome will depend on whether the countries cooperate or not. This paper presents the cooperative outcome and the open-loop and Markov-perfect Nash equilibria of the acid rain differential game. It will be shown that the depositions always converge to the critical loads but the steady-state levels of the buffer stocks differ. The theory is used to analyse the acid rain differential game for sulphur between Great Britain and Ireland. Finally, some results are given for the whole of Europe. Copyright Kluwer Academic Publishers 1998

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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 12 (1998)
Issue (Month): 2 (September)
Pages: 167-184

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Handle: RePEc:kap:enreec:v:12:y:1998:i:2:p:167-184

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Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: acid rain; critical loads; differential games;

References

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  1. Tsutsui, Shunichi & Mino, Kazuo, 1990. "Nonlinear strategies in dynamic duopolistic competition with sticky prices," Journal of Economic Theory, Elsevier, vol. 52(1), pages 136-161, October.
  2. Gaitsgory, Vladimir & Nitzan, Shmuel, 1994. "A folk theorem for dynamic games," Journal of Mathematical Economics, Elsevier, vol. 23(2), pages 167-178, March.
  3. Dockner Engelbert J. & Van Long Ngo, 1993. "International Pollution Control: Cooperative versus Noncooperative Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 13-29, July.
  4. Fudenberg, Drew & Maskin, Eric, 1986. "The Folk Theorem in Repeated Games with Discounting or with Incomplete Information," Econometrica, Econometric Society, vol. 54(3), pages 533-54, May.
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Citations

RePEc Biblio mentions

As found on the RePEc Biblio, the curated bibliography for Economics:
  1. > Environmental and Natural Resource Economics > Environmental Economics > Economics of acidification
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Cited by:
  1. GERMAIN, Marc & TOINT, Philippe & TULKENS, Henry & DE ZEEUW, Aart, 1998. "Transfers to sustain core-theoretic cooperation in international stock pollutant control," CORE Discussion Papers 1998032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Hennessy, David A., 2008. "Biosecurity incentives, network effects, and entry of a rapidly spreading pest," Ecological Economics, Elsevier, vol. 68(1-2), pages 230-239, December.
  3. Francisco Alvarez-Cuadrado & Ngo Van Long, 2008. "Relative Consumption and Resource Extraction," CIRANO Working Papers 2008s-27, CIRANO.
  4. Claudio Piga, 2003. "Pigouvian Taxation in Tourism," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 26(3), pages 343-359, November.
  5. Finus, Michael & Tjotta, Sigve, 2003. "The Oslo Protocol on sulfur reduction: the great leap forward?," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2031-2048, September.
  6. Santiago J. Rubio, 2001. "International Cooperation In Pollution Control," Working Papers. Serie AD 2001-21, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  7. Basak Bayramoglu, 2004. "Transboundary pollution in the black sea : comparison of institutional arrangements," Cahiers de la Maison des Sciences Economiques v04020, Université Panthéon-Sorbonne (Paris 1).
  8. Kristen A. Sheeran, 2006. "Side Payments of Exceptions: The Implications for Equitable and Efficient Climate Control," Eastern Economic Journal, Eastern Economic Association, vol. 32(3), pages 515-532, Summer.
  9. Schmieman, Erik C. & van Ierland, Ekko C., 1999. "Dynamics of soil acidification: an economic analysis," Ecological Economics, Elsevier, vol. 31(3), pages 449-462, December.
  10. GERMAIN, Marc & VAN YPERSELE, Jean-Pascal, 1999. "Financial transfers to sustain international cooperation in the climate change framework," CORE Discussion Papers 1999036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  11. Ciscar, Juan Carlos & Soria, Antonio, 2002. "Prospective analysis of beyond Kyoto climate policy: a sequential game framework," Energy Policy, Elsevier, vol. 30(15), pages 1327-1335, December.
  12. Ansuategi, Alberto & Escapa, Marta, 2002. "Economic growth and greenhouse gas emissions," Ecological Economics, Elsevier, vol. 40(1), pages 23-37, January.
  13. van den Broek, W. A., 2002. "Moving horizon control in dynamic games," Journal of Economic Dynamics and Control, Elsevier, vol. 26(6), pages 937-961, June.
  14. Erik Schmieman & Ekko van Ierland & Leen Hordijk, 2002. "Dynamic Efficiency with Multi-Pollutants and Multi-Targets The Case of Acidification and Tropospheric Ozone Formation in Europe," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 23(2), pages 133-148, October.

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