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 transfers 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 Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number v05014.
Length: 58 pages
Date of creation: Feb 2005
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Transboundary pollution; cooperative games; bargaining; standards; transfers.;
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Find related papers by JEL classification:
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-04-16 (All new papers)
- NEP-ENV-2005-04-16 (Environmental Economics)
- NEP-GTH-2005-04-16 (Game Theory)
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- Jacques, Jean-François & Bayramoglu, Basak, 2011.
"The role of fixed cost in international environmental negotiations,"
Economics Papers from University Paris Dauphine
123456789/5873, Paris Dauphine University.
- Bayramoglu, Basak & Jacques, Jean-François, 2011. "The role of fixed cost in international environmental negotiations," Environment and Development Economics, Cambridge University Press, vol. 16(02), pages 221-238, April.
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