Adaptation and the Allocation of Pollution Reduction Costs
We consider a game of abatement of a transboundary pollutant. We use a time-consistent Shapley value allocation of the cost of pollution reduction, and study the sensitivity of such an allocation to countries’ adaptation to pollution. A country’s adaptation to pollution is captured by a change in its damage function. We show that if there is a reduction in the damage cost of one country only, this can harm the other countries. Some countries may end up worse off even in the case where all countries experience a uniform decrease in their damage from pollution. An important policy implication of our analysis is that the Shapley value approach to the allocation of abatement costs does not necessarily provide the right incentives for all players to act on reducing pollution damage. We determine conditions under which a uniform fall in all countries’ pollution damage benefits all countries. Copyright Springer Science+Business Media New York 2014
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 4 (2014)
Issue (Month): 1 (March)
|Contact details of provider:|| Web page: http://www.springer.com/economics/journal/13235|
|Order Information:||Web: http://link.springer.de/orders.htm|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Buob, Seraina & Stephan, Gunter, 2011. "To mitigate or to adapt: How to confront global climate change," European Journal of Political Economy, Elsevier, vol. 27(1), pages 1-16, March.
- Athanassoglou, Stergios & Xepapadeas, Anastasios, 2012. "Pollution control with uncertain stock dynamics: When, and how, to be precautious," Journal of Environmental Economics and Management, Elsevier, vol. 63(3), pages 304-320.
- Chander, Parkash & Tulkens, Henry, 1994.
"A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution,"
897, California Institute of Technology, Division of the Humanities and Social Sciences.
- Parkash Chander & Henry Tulkens, 1995. "A core-theoretic solution for the design of cooperative agreements on transfrontier pollution," International Tax and Public Finance, Springer, vol. 2(2), pages 279-293, August.
- CHANDER, Parkash & TULKENS, Henry, 1994. "A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution," CORE Discussion Papers 1994048, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Nadezhda Kozlovskaya & Leon Petrosyan & Nikolay Zenkevich, 2010. "Coalitional Solution Of A Game-Theoretic Emission Reduction Model," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 12(03), pages 275-286.
- Agrawala, Shardul & Bosello, Francesco & Carraro, Carlo & de Cian, Enrica & Lanzi, Elisa, 2011. "Adapting to Climate Change: Costs, Benefits, and Modelling Approaches," International Review of Environmental and Resource Economics, now publishers, vol. 5(3), pages 245-284, August.
- Germain, M. & Toint, Ph. & Tulkens, H. & de Zeeuw, A.J., 2003. "Transfers to sustain dynamic core-theoretic cooperation in international stock pollutant control," Other publications TiSEM 8953bc6e-fc65-4fd7-a2d1-6, Tilburg University, School of Economics and Management.
- Aldy, Joseph E. & Krupnick, Alan J. & Newell, Richard G. & Parry, Ian W.H. & Pizer, William A., 2009.
"Designing Climate Mitigation Policy,"
dp-08-16, Resources For the Future.
- Thierry Bréchet & Natali Hritonenko & Yuri Yatsenko, 2013.
"Adaptation and Mitigation in Long-term Climate Policy,"
Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 55(2), pages 217-243, June.
- BRECHET, Thierry & HRITONENKO, Natali & YATSENKO, Yuri, . "Adaptation and mitigation in long-term climate policy," CORE Discussion Papers RP 2479, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Germain, Marc & Toint, Philippe & Tulkens, Henry & de Zeeuw, Aart, 2003. "Transfers to sustain dynamic core-theoretic cooperation in international stock pollutant control," Journal of Economic Dynamics and Control, Elsevier, vol. 28(1), pages 79-99, October.
- Brechet, Thierry & HRITONENKO, Natali & YATSENKO, Yuri, 2010. "Adaptation and mitigation in long-term climate policies," CORE Discussion Papers 2010065, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
- Petrosjan, Leon & Zaccour, Georges, 2003. "Time-consistent Shapley value allocation of pollution cost reduction," Journal of Economic Dynamics and Control, Elsevier, vol. 27(3), pages 381-398, January.
- Ficre Zehaie, 2009. "The Timing and Strategic Role of Self-Protection," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 44(3), pages 337-350, November.
- Leon Petrosjan & Svetlana Mamkina, 2006. "Dynamic Games With Coalitional Structures," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 8(02), pages 295-307.
When requesting a correction, please mention this item's handle: RePEc:spr:dyngam:v:4:y:2014:i:1:p:32-57. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F Baum)
If references are entirely missing, you can add them using this form.