IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v36y2014icp441-446.html
   My bibliography  Save this article

Climate game analyses for CO2 emission trading among various world organizations

Author

Listed:
  • Wu, Pei-Ing
  • Chen, Chai Tzu
  • Cheng, Pei-Ching
  • Liou, Je-Liang

Abstract

This paper simulates the saving in terms of the total abatement cost of CO2 emission reductions for different trading games reflecting the potential cooperation among organizations including the European Union (EU), the Asia-Pacific Economic Cooperation (APEC) countries, the Union of South American Nations (USAN), and the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC). A game approach is conducted to determine if the cooperation will come into existence among the organizations stated above. A similar idea is applied to the four largest emission countries, China, the United States, Russia, and India, as four individual players in the trading game.

Suggested Citation

  • Wu, Pei-Ing & Chen, Chai Tzu & Cheng, Pei-Ching & Liou, Je-Liang, 2014. "Climate game analyses for CO2 emission trading among various world organizations," Economic Modelling, Elsevier, vol. 36(C), pages 441-446.
    • Handle: RePEc:eee:ecmode:v:36:y:2014:i:c:p:441-446
    DOI: 10.1016/j.econmod.2013.08.025
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999313003416
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econmod.2013.08.025?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Asheim, Geir B. & Froyn, Camilla Bretteville & Hovi, Jon & Menz, Fredric C., 2006. "Regional versus global cooperation for climate control," Journal of Environmental Economics and Management, Elsevier, vol. 51(1), pages 93-109, January.
    2. Eyckmans, Johan & Kverndokk, Snorre, 2010. "Moral concerns on tradable pollution permits in international environmental agreements," Ecological Economics, Elsevier, vol. 69(9), pages 1814-1823, July.
    3. Jürgen Scheffran & Stefan Pickl, 2000. "Control and game-theoretic assessment of climate change: Options for Joint Implementation," Annals of Operations Research, Springer, vol. 97(1), pages 203-212, December.
    4. Tsung-Chen Lee, 2011. "Endogenous market structures in non-cooperative international emissions trading," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 16(6), pages 663-675, August.
    5. Pittel, Karen & Rübbelke, Dirk T. G., 2012. "Transitions in the negotiations on climate change," Munich Reprints in Economics 19343, University of Munich, Department of Economics.
    6. Barbara Buchner & Carlo Carraro, 2003. "Emissions Trading Regimes and Incentives to Participate in International Climate Agreements," Working Papers 2003.104, Fondazione Eni Enrico Mattei.
    7. Lasse Ringius & Asbjørn Torvanger & Arild Underdal, 2002. "Burden Sharing and Fairness Principles in International Climate Policy," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 2(1), pages 1-22, March.
    8. Fare, Rolf & Grosskopf, Shawna & Weber, William L., 2006. "Shadow prices and pollution costs in U.S. agriculture," Ecological Economics, Elsevier, vol. 56(1), pages 89-103, January.
    9. Carlo Carraro (ed.), 2003. "The Endogenous Formation of Economic Coalitions," Books, Edward Elgar Publishing, number 2999.
    10. Jaehn, Florian & Letmathe, Peter, 2010. "The emissions trading paradox," European Journal of Operational Research, Elsevier, vol. 202(1), pages 248-254, April.
    11. Klinge Jacobsen, Henrik, 1998. "Integrating the bottom-up and top-down approach to energy-economy modelling: the case of Denmark," Energy Economics, Elsevier, vol. 20(4), pages 443-461, September.
    12. Bernard, A. & Haurie, A. & Vielle, M. & Viguier, L., 2008. "A two-level dynamic game of carbon emission trading between Russia, China, and Annex B countries," Journal of Economic Dynamics and Control, Elsevier, vol. 32(6), pages 1830-1856, June.
    13. Scott Barrett & Robert Stavins, 2003. "Increasing Participation and Compliance in International Climate Change Agreements," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 3(4), pages 349-376, December.
    14. David Maradan & Anatoli Vassiliev, 2005. "Marginal Costs of Carbon Dioxide Abatement: Empirical Evidence from Cross-Country Analysis," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 141(III), pages 377-410, September.
    15. Karen Pittel & Dirk Rübbelke, 2012. "Transitions in the negotiations on climate change: from prisoner’s dilemma to chicken and beyond," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 12(1), pages 23-39, March.
    16. Forgo, Ferenc & Fulop, Janos & Prill, Maria, 2005. "Game theoretic models for climate change negotiations," European Journal of Operational Research, Elsevier, vol. 160(1), pages 252-267, January.
    17. Jan von der Goltz, 2009. "High Stakes in a Complex Game: A Snapshot of the Climate Change Negotiating Positions of Major Developing Country Emitters," Working Papers 177, Center for Global Development.
    18. Fare, Rolf, et al, 1993. "Derivation of Shadow Prices for Undesirable Outputs: A Distance Function Approach," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 374-380, May.
    19. Odd Godal & Bjart Holtsmark, 2011. "Permit Trading: Merely an Efficiency‐Neutral Redistribution away from Climate‐Change Victims?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(4), pages 784-797, December.
    20. Carfì, David & Schilirò, Daniele, 2012. "A coopetitive model for the green economy," Economic Modelling, Elsevier, vol. 29(4), pages 1215-1219.
    21. Peter Wood, 2010. "Climate Change and Game Theory," Environmental Economics Research Hub Research Reports 1062, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
    22. Warwick J. McKibbin & Peter J. Wilcoxen, 2002. "The Role of Economics in Climate Change Policy," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 107-129, Spring.
    23. Michael Hopkin, 2004. "The carbon game," Nature, Nature, vol. 432(7015), pages 268-270, November.
    24. Marcel M. Berk & Michel G.J. den Elzen, 2001. "Options for differentiation of future commitments in climate policy: how to realise timely participation to meet stringent climate goals?," Climate Policy, Taylor & Francis Journals, vol. 1(4), pages 465-480, December.
    25. Wu, Pei-Ing & Chen, Chai Tzu & Liou, Je-Liang, 2013. "The meta-technology cost ratio: An indicator for judging the cost performance of CO2 reduction," Economic Modelling, Elsevier, vol. 35(C), pages 1-9.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. He, Weijun & Yang, Yi & Wang, Zhaohua & Zhu, Joe, 2018. "Estimation and allocation of cost savings from collaborative CO2 abatement in China," Energy Economics, Elsevier, vol. 72(C), pages 62-74.
    2. Adhitya Wardhono & Panji Tirta Nirwana Putra & M. Abd. Nasir, 2016. "Causal study of macroeconomic indicators on carbon dioxide emission in ASEAN 5," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2016(2), pages 15-31.
    3. Cosimo Magazzino, 2017. "The relationship among economic growth, CO2 emissions, and energy use in the APEC countries: a panel VAR approach," Environment Systems and Decisions, Springer, vol. 37(3), pages 353-366, September.
    4. Jiali Zheng & Han Qiao & Shouyang Wang, 2017. "The Effect of Carbon Tax in Aviation Industry on the Multilateral Simulation Game," Sustainability, MDPI, vol. 9(7), pages 1-24, July.
    5. Zhang, Xiao-Bing & Zhu, Lei, 2017. "Strategic carbon taxation and energy pricing under the threat of climate tipping events," Economic Modelling, Elsevier, vol. 60(C), pages 352-363.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Irene Alvarado-Quesada & Hans-Peter Weikard, 2017. "International Environmental Agreements for biodiversity conservation: a game-theoretic analysis," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(5), pages 731-754, October.
    2. Wu, Pei-Ing & Chen, Chai Tzu & Liou, Je-Liang, 2013. "The meta-technology cost ratio: An indicator for judging the cost performance of CO2 reduction," Economic Modelling, Elsevier, vol. 35(C), pages 1-9.
    3. Rübbelke, Dirk T.G., 2011. "International support of climate change policies in developing countries: Strategic, moral and fairness aspects," Ecological Economics, Elsevier, vol. 70(8), pages 1470-1480, June.
    4. Jon Hovi & Hugh Ward & Frank Grundig, 2015. "Hope or Despair? Formal Models of Climate Cooperation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(4), pages 665-688, December.
    5. Marco Grasso, 2004. "Climate change: the global public good," Working Papers 75, University of Milano-Bicocca, Department of Economics, revised May 2004.
    6. Kennedy, Matthew & Basu, Biswajit, 2014. "An analysis of the climate change architecture," Renewable and Sustainable Energy Reviews, Elsevier, vol. 34(C), pages 185-193.
    7. Johan Eyckmans & Michael Finus, 2006. "New roads to international environmental agreements: the case of global warming," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 7(4), pages 391-414, December.
    8. Du, Limin & Hanley, Aoife & Wei, Chu, 2015. "Estimating the Marginal Abatement Cost Curve of CO2 Emissions in China: Provincial Panel Data Analysis," Energy Economics, Elsevier, vol. 48(C), pages 217-229.
    9. Barbara Buchner & Carlo Carraro, 2004. "Economic and environmental effectiveness of a technology-based climate protocol," Climate Policy, Taylor & Francis Journals, vol. 4(3), pages 229-248, September.
    10. Bonilla, Jorge & Coria, Jessica & Sterner, Thomas, 2012. "Synergies and Trade-offs between Climate and Local Air Pollution: Policies in Sweden," Working Papers in Economics 529, University of Gothenburg, Department of Economics.
    11. Minxing Jiang & Bangzhu Zhu & Julien Chevallier & Rui Xie, 2018. "Allocating provincial CO2 quotas for the Chinese national carbon program," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(3), pages 457-479, July.
    12. Stavins, Robert, 2004. "Can an Effective Global Climate Treaty be Based on Sound Science, Rational Economics, and Pragmatic Politics?," Working Paper Series rwp04-020, Harvard University, John F. Kennedy School of Government.
    13. Adrian Amelung, 2016. "Das "Paris-Agreement": Durchbruch der Top-Down-Klimaschutzverhandlungen im Kreise der Vereinten Nationen," Otto-Wolff-Institut Discussion Paper Series 03/2016, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland.
    14. Aurélie Méjean & Franck Lecocq & Yacob Mulugetta, 2015. "Equity, burden sharing and development pathways: reframing international climate negotiations," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 15(4), pages 387-402, November.
    15. Gersbach, Hans & Winkler, Ralph, 2011. "International emission permit markets with refunding," European Economic Review, Elsevier, vol. 55(6), pages 759-773, August.
    16. Wen, Xiaojie & Yao, Shunbo & Sauer, Johannes, 2022. "Shadow prices and abatement cost of soil erosion in Shaanxi Province, China: Convex expectile regression approach," Ecological Economics, Elsevier, vol. 201(C).
    17. Zhou, P. & Wang, M., 2016. "Carbon dioxide emissions allocation: A review," Ecological Economics, Elsevier, vol. 125(C), pages 47-59.
    18. Correa, Juan A. & Gómez, Marcos & Luengo, Andrés & Parro, Francisco, 2021. "Environmental misallocation in the copper industry," Resources Policy, Elsevier, vol. 71(C).
    19. Dobes Leo & Jotzo Frank & Stern David I., 2014. "The Economics of Global Climate Change: A Historical Literature Review," Review of Economics, De Gruyter, vol. 65(3), pages 281-320, December.
    20. Geiguen Shin, 2022. "How Ostrom's design principles apply to large‐scale commons: Cooperation over international river basins," Review of Policy Research, Policy Studies Organization, vol. 39(5), pages 674-697, September.

    More about this item

    Keywords

    Nash equilibrium; Marginal abatement cost; Directional distance function; Shadow price model; Emission trading game;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:36:y:2014:i:c:p:441-446. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.