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Transfers to sustain core-theoretic cooperation in international stock pollutant control

  • GERMAIN, Marc

    ()

    (Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium)

  • TOINT, Philippe

    ()

    (Département de Mathématique, Facultés Universitaires Notre-Dame de la Paix, Namur)

  • TULKENS, Henry

    ()

    (Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium)

  • DE ZEEUW, Aart

    ()

    (Département of Economics and CentER, Tilburg University)

International environmental agreements aiming at correcting negative externalities generated by transboundary pollution are difficult to achieve for many reasons. Important obstacles arise from asymmetry in costs and benefits, and instability may occur due to the fact that coalitions of countries may attempt to do better for themselves outside of any proposed agreement. In a static context, it has already been shown that it is possible to achieve stability in the sense of the core of a cooperative game, by means of appropriately defined transfers between the countries involved. However, the transboundary pollution problems that are most important are caused by accumulated pollutants so that a dynamic analysis is required. This paper provides a transfer scheme that yields a core property in a dynamic context. The possibility of computing such transfers numerically is discussed.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1998032.

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Date of creation: 01 May 1998
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Handle: RePEc:cor:louvco:1998032
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  1. Veijo Kaitala & Matti Pohjola & Olli Tahvonen, 1992. "Transboundary air pollution and soil acidification: A dynamic analysis of an acid rain game between Finland and the USSR," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 2(2), pages 161-181, March.
  2. Henry Tulkens & Parkash Chander, 1997. "The Core of an Economy with Multilateral Environmental Externalities," International Journal of Game Theory, Springer, vol. 26(3), pages 379-401.
  3. van der Ploeg, F. & de Zeeuw, A.J., 1990. "International aspects of pollution control," Discussion Paper 1990-65, Tilburg University, Center for Economic Research.
  4. 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.
  5. Karl-Göran Mäler & Aart De Zeeuw, 1998. "The Acid Rain Differential Game," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 12(2), pages 167-184, September.
  6. Carraro, Carlo & Siniscalco, Domenico, 1991. "Strategies for the International Protection of the Environment," CEPR Discussion Papers 568, C.E.P.R. Discussion Papers.
  7. Houba, H.E.D. & de Zeeuw, A.J., 1992. "Strategic bargaining for the control of a dynamic system in state-space form," Discussion Paper 1992-36, Tilburg University, Center for Economic Research.
  8. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen.
  9. GERMAIN , Marc & TOINT , Philippe & TULKENS, Henry, 1997. "Financial transfers to ensure cooperative international optimality in stock pollutant abatement," CORE Discussion Papers 1997001, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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