How long can excess pollution persist? The non-cooperative case
AbstractThis 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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Date of creation: May 2008
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Publication status: Published, Resource and Energy Economics, 2008, 30, 2, 277-293
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war of attrition; environmental negotiations; climate change;
Other versions of this item:
- Hénin, Pierre-Yves & Schubert, Katheline, 2008. "How long can excess pollution persist? The non-cooperative case," Resource and Energy Economics, Elsevier, vol. 30(2), pages 277-293, May.
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