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How long can excess pollution persist? The non-cooperative case

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  • Pierre-Yves Hénin

    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

  • Katheline Schubert

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

Abstract

This paper describes a world composed of two (groups of) countries, which derive their utility from a polluting activity and from the enjoyment of a common environmental quality. The initial situation is both suboptimal and unsustainable: pollution leads to a continuous deterioration of environmental quality. The two countries have heterogeneous preferences for the environment, which are private knowledge. This prevents the adoption of abatement policies negotiated between the two countries, because each one has a strong incentive to announce in every negotiation an arbitrarily low preference for the environment. The two countries then engage in a war of attrition, each of them postponing abatement policies, in the hope that the other will concede ...rst and abate more. We study for how long the adjustment is postponed, according to initial conditions, the greenness of the greenest country, the possible range of preferences and the rates of discount and natural regeneration.

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Bibliographic Info

Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-00267762.

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Date of creation: May 2008
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Publication status: Published, Resource and Energy Economics, 2008, 30, 2, 277-293
Handle: RePEc:hal:cesptp:hal-00267762

Note: View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00267762
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Related research

Keywords: war of attrition; environmental negotiations; climate change;

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  1. Barrett, Scott, 1998. "Political Economy of the Kyoto Protocol," Oxford Review of Economic Policy, Oxford University Press, vol. 14(4), pages 20-39, Winter.
  2. Michael Hoel, 1992. "International environment conventions: The case of uniform reductions of emissions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 2(2), pages 141-159, March.
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  4. Alesina, A. & Drazen, A., 1991. "Why Are Stabilizations Delayed?," Papers, Tel Aviv - the Sackler Institute of Economic Studies 6-91, Tel Aviv - the Sackler Institute of Economic Studies.
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  6. Chander, Parkash & Tulkens, Henry, 1992. "Theoretical foundations of negotiations and cost sharing in transfrontier pollution problems," European Economic Review, Elsevier, vol. 36(2-3), pages 388-399, April.
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  8. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October.
  9. 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.
  10. Bliss, Christopher & Nalebuff, Barry, 1984. "Dragon-slaying and ballroom dancing: The private supply of a public good," Journal of Public Economics, Elsevier, vol. 25(1-2), pages 1-12, November.
  11. Carre, Martine, 2000. "Debt stabilization with a deadline," European Economic Review, Elsevier, vol. 44(1), pages 71-90, January.
  12. Bac, Mehmet, 1996. "Incomplete Information and Incentives to Free Ride on International Environmental Resources," Journal of Environmental Economics and Management, Elsevier, vol. 30(3), pages 301-315, May.
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