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An n-country model of strategic emissions abatement: feedback strategies and cooperation

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  • Eric Bahel

Abstract

The present paper proposes a dynamic framework for the analysis of emissions abatement by different countries. Unlike many related works, it emphasizes the non-cooperative aspects of this issue. We derive the feedback Nash equilibrium as well as the cooperative emissions paths. Under the cooperative scenario, pollution is always lower: the international agency imposes lower emissions to the countries in early periods. Surprisingly enough, emissions might be higher in very distant periods under the cooperative scenario. A transfer scheme allowing to achieve global effciency is proposed.

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File URL: ftp://repec.econ.vt.edu/Papers/Bahel/Paper_strategic_abatement.pdf
File Function: First version, 2010
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Bibliographic Info

Paper provided by Virginia Polytechnic Institute and State University, Department of Economics in its series Working Papers with number e07-25.

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Length: 20 pages
Date of creation: 2010
Date of revision:
Handle: RePEc:vpi:wpaper:e07-25

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Keywords: emissions; strategic abatement; pollution stock; feedback (closed-loop) Nash equilibrium; cooperation; transfers.;

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