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A Two-Level Dynamic Game of Carbon Emissions Trading Between Russia, China, and Annex B Countries

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Listed:
  • Bernard, A.
  • Haurie, A.
  • Vielle, M.
  • Viguier, L.

Abstract

This paper proposes a computable dynamic game model of the strategic competition between Russia and developing countries (DCs), mainly represented by China, on the international market of emissions permits created by the Kyoto protocol. The model uses a formulation of a demand function for permits from Annex B countries and of marginal abatement costs (MAC) in Russia and China provided by two detailed models. GEMINI-E3 is a computable general equilibrium model that provides the data to estimate Annex B demand for permits and MACs in Russia. POLES is a partial equilibrium model that is used to obtain MAC curves for China. The competitive scenario is compared with a monopoly situation where only Russia is allowed to play strategically. The impact of allowing DCs to intervene on the international emissions trading market is thus assessed.

Suggested Citation

  • Bernard, A. & Haurie, A. & Vielle, M. & Viguier, L., 2003. "A Two-Level Dynamic Game of Carbon Emissions Trading Between Russia, China, and Annex B Countries," Conference papers 331073, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331073
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