Comparison of negotiated uniform versus differentiated abatement standards for a transboundary pollution problem
AbstractThis paper analyses a transboundary pollution problem between two countries and studies the efficiency comparison of uniform versus differentiated abatement standards when there are imperfect transferts between countries. To achieve this goal, we use a negotiation game and the Nash bargaining solution as equilibrium. On the one hand, we remark that the argument of similarity of countries to defend the use of uniform standards is not appropriate, when there exists high level of fixed costs in abatement technology for symmetric countries. On the other hand, for asymmetric countries, according to the total welfare criteria, we notice first that differentiated standards with transfers are generally better than uniform standards with transfers. Secondly, differentiated standards without transfers always outperform uniform standards without transfers. Last, the numerical results show that the asymmetry on abatement benefits between the countries makes the uniform regime with imperfect transfers better than the differentiated regime without transfers, while an asymmetry on abatement costs gives the opposite result.
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Bibliographic InfoPaper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00193609.
Date of creation: Feb 2005
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Transboundary pollution; cooperative games; bargaining; standards; transfers.;
Other versions of this item:
- Basak Bayramoglu & Jean-François Jacques, 2005. "Comparison of negotiated uniform versus differentiated abatement standards for a transboundary pollution problem," Cahiers de la Maison des Sciences Economiques v05014, Université Panthéon-Sorbonne (Paris 1).
- Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
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