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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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File URL: http://hdl.handle.net/10.1023/A:1008273509255
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Publisher 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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Related research
Keywords: acid rain; critical loads; differential games;

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. 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. [Downloadable!] (restricted)
  2. Newbery, David M G, 1990. "Acid Rain," CEPR Discussion Papers 442, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  3. 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. [Downloadable!] (restricted)
  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. [Downloadable!] (restricted)
  5. Gaitsgory, Vladimir & Nitzan, Shmuel, 1994. "A folk theorem for dynamic games," Journal of Mathematical Economics, Elsevier, vol. 23(2), pages 167-178, March. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Francisco Alvarez-Cuadrado & Ngo Van Long, 2008. "Relative Consumption and Resource Extraction," CIRANO Working Papers 2008s-27, CIRANO. [Downloadable!]
  2. 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). [Downloadable!]
  3. Claudio A. Piga, 2006. "Pigouvian Taxation in Tourism," Discussion Paper Series 2006_2, Department of Economics, Loughborough University, revised Jan 2006. [Downloadable!]
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  4. Basak Bayramoglu, 2006. "Transboundary Pollution in the Black Sea: Comparison of Institutional Arrangements," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 35(4), pages 289-325, December. [Downloadable!] (restricted)
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