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Domestic environmental policy and international cooperation for global commons

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  • BRECHET, Thierry

    () (Université catholique de Louvain, CORE & Louvain School of Management, Belgium; Chair Lhoist Berghmans)

  • HRITONENKO, Natali

    (Houston Baptist University, Texas, USA)

  • YATSENKO, Yuri

    (Houston Baptist University, Texas, USA)

Abstract

The paper analyzes the strategic behavior of several countries engaged in capital accumulation, pollution mitigation, and environmental adaptation in the context of an environmental common good. Both cooperative and non-cooperative strategies are discussed. The non-cooperative strategy is a dynamic game in which each country makes its own environmental decision following the open-loop Nash equilibrium. The cooperative social planner problem assumes an international environmental agreement in force. The non-cooperative and cooperative solutions are compared in the symmetric case of two countries and extended to several identical countries. It is shown that the non- cooperative strategy in multi-country world leads to over-production, over-consumption, over-pollution, and over-adaptation.

Suggested Citation

  • BRECHET, Thierry & HRITONENKO, Natali & YATSENKO, Yuri, 2014. "Domestic environmental policy and international cooperation for global commons," CORE Discussion Papers 2014045, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2014045
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    References listed on IDEAS

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    10. Francesco Bosello & Carlo Carraro & Enrica De Cian, 2010. "Climate Policy And The Optimal Balance Between Mitigation, Adaptation And Unavoided Damage," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 1(02), pages 71-92.
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    Cited by:

    1. Henry Tulkens, 2016. "COP 21 and Economic Theory: Taking Stock," CESifo Working Paper Series 5918, CESifo Group Munich.
    2. Henry Tulkens, 2016. "COP 21 and Economic Theory: Taking Stock," Working Papers 2016.40, Fondazione Eni Enrico Mattei.
    3. Ingmar Schumacher, 2016. "Climate Policy Must Favour Mitigation Over Adaptation," Working Papers 2016-633, Department of Research, Ipag Business School.
    4. Han, Aiping & Ge, Jianping & Lei, Yalin, 2016. "Vertical vs. horizontal integration: Game analysis for the rare earth industrial integration in China," Resources Policy, Elsevier, vol. 50(C), pages 149-159.
    5. Tulkens, Henry, 2016. "COP 21 and Economic Theory: Taking Stock," ET: Economic Theory 236237, Fondazione Eni Enrico Mattei (FEEM).

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