Modelling environmental cooperation on reciprocal emission reduction via virtual market system

  • Andries Nentjes
  • , Sergey Shibayev

    Research output: Chapter in Book/Report/Conference proceedingConference contributionAcademicpeer-review

    Abstract

    Mainstream economic theory views international agreements on reduction of trans-boundary pollution as a Pareto-optimal outcome of negotiations among self-interested parties. This paper elaborates that notion by modelling negotiation as a multilateral trade in reciprocal emission reductions within the framework of non-cooperative games. A simulation of negotiations on joint reduction of sulphur dioxide emissions in Europe is carried out. The question is whether economic theory's postulate of Pareto-efficient international conventions on pollution reduction are adequate and do explain actual commitments of the parties. We verify by comparing the Pareto-optimal simulation with the actual emission reduction commitments made in the Second Sulphur Protocol (SSP, 1994) and find that for SSP joint benefits exceed joint costs but some countries have negative benefits.

    Original languageEnglish
    Title of host publicationHETERODOX VIEWS ON ECONOMICS AND THE ECONOMY OF THE GLOBAL SOCIETY
    EditorsG Meijer, WJM Heijman, JAC VanOphem, BHJ Verstegen
    Place of PublicationWAGENINGEN
    PublisherWageningen Academic Publishers
    Pages297-309
    Number of pages13
    ISBN (Print)978-90-8686-588-8
    Publication statusPublished - 2006
    Event8th Conference of the International-Society-for-Intercommunication-of-New-Ideas (ISINI) - , Netherlands
    Duration: 25-Aug-200526-Aug-2005

    Publication series

    NameMansholt Publication Series
    PublisherWAGENINGEN ACAD PUBL
    Volume1
    ISSN (Print)1871-9309

    Other

    Other8th Conference of the International-Society-for-Intercommunication-of-New-Ideas (ISINI)
    Country/TerritoryNetherlands
    Period25/08/200526/08/2005

    Keywords

    • non-cooperative games
    • international environmental policy
    • emission reduction exchange

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