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Comparison of negotiated uniform versus differentiated abatement standards for a transboundary pollution problem

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  • Basak Bayramoglu

    () (PJSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, EUREQUA - Equipe Universitaire de Recherche en Economie Quantitative - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Jean-François Jacques

    () (EQUIPE UNIVERSITAIRE DE RECHERCHE "INSTITUTIONS : COORDINATION, ORGANISATION" - EURIsCO - Université Paris-Dauphine)

Abstract

This paper analyses a transboundary pollution problem between two countries and studies the efficiency comparison of uniform versus differentiated abatement standards when there are imperfect transferts between countries. To achieve this goal, we use a negotiation game and the Nash bargaining solution as equilibrium. On the one hand, we remark that the argument of similarity of countries to defend the use of uniform standards is not appropriate, when there exists high level of fixed costs in abatement technology for symmetric countries. On the other hand, for asymmetric countries, according to the total welfare criteria, we notice first that differentiated standards with transfers are generally better than uniform standards with transfers. Secondly, differentiated standards without transfers always outperform uniform standards without transfers. Last, the numerical results show that the asymmetry on abatement benefits between the countries makes the uniform regime with imperfect transfers better than the differentiated regime without transfers, while an asymmetry on abatement costs gives the opposite result.

Suggested Citation

  • Basak Bayramoglu & Jean-François Jacques, 2005. "Comparison of negotiated uniform versus differentiated abatement standards for a transboundary pollution problem," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00193609, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00193609 Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00193609
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    Keywords

    transfers; Transboundary pollution; cooperative games; bargaining; standards; transfers.; Pollution transfrontalière; jeux coopératifs; négociation; normes; transferts.;

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games

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