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An Iterative Process for International Negotiations on Acid Rain in Northern Europe Using a General Convex Formulation

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  • M. Germain

  • Ph.L. Toint

Abstract

This paper proposes a game theoretical approach of internationalnegotiations on transboundary pollution. This approach is distinguished bya discrete time formulation and by a suitable formulation of the localinformation assumption on cost and damage functions: at each stage of thenegotiation, the parties assign the best possible cooperative state, giventhe available information, as an objective for the next stage. It is shownthat the resulting sequences of states converges from a non-cooperativesituation to an international optimum in a finite number of stages.Furthermore, a financial transfer structure is also presented that makesthe desired sequence of states individually rational and stategically stable.The concepts are applied in a numerical simulation of the SO 2 transboundary pollution problem related to acid rain in Northern Europe. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • M. Germain & Ph.L. Toint, 2000. "An Iterative Process for International Negotiations on Acid Rain in Northern Europe Using a General Convex Formulation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 15(3), pages 199-216, March.
    • Handle: RePEc:kap:enreec:v:15:y:2000:i:3:p:199-216
    DOI: 10.1023/A:1008301613492
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    References listed on IDEAS

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    1. Parkash Chander & Henry Tulkens, 2006. "A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 176-193, Springer.
    2. Chander, P. & Tulkens, H., 1991. "Strategically Stable Cost Sharing in an Economic- Ecological Negotiation Process," LIDAM Discussion Papers CORE 1991035, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Kaitala, Veijo & Pohjola, Matti, 1992. "Acid Rain and International Environmental Aid: A Case Study of Transboundary Air Pollution Between Finland, Russia and Estonia," Discussion Papers 400, The Research Institute of the Finnish Economy.
    4. Germain, M. & Toint, P. & Tulkens, H., 1996. "Calcul économique itératif et stratégique pour les négociations internationales sur les pluies acides entre la Finlande, la Russie et l'Estonie," LIDAM Reprints CORE 1217, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Parkash Chander & Henry Tulkens, 2006. "The Core of an Economy with Multilateral Environmental Externalities," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 153-175, Springer.
    6. J. H. Dreze & D. de la Vallee Poussin, 1971. "A Tâtonnement Process for Public Goods," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(2), pages 133-150.
    7. repec:adr:anecst:y:1996:i:43:p:05 is not listed on IDEAS
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    Cited by:

    1. Stefan A. Hajkowicz, 2012. "For the Greater Good? A Test for Strategic Bias in Group Environmental Decisions," Group Decision and Negotiation, Springer, vol. 21(3), pages 331-344, May.

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