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A differential game of international pollution control with evolving environmental costs

Published online by Cambridge University Press:  11 September 2013

Nahid Masoudi  and
Georges Zaccour
Nahid Masoudi
Affiliation:
GERAD, HEC Montréal, Canada. E-mail: nahid.masoudi@hec.ca
Georges Zaccour
Affiliation:
GERAD, HEC Montréal, 3000 chemin de la Côte-Sainte-Catherine, Montréal, Québec, CanadaH3T 2A7. E-mail: Georges.Zaccour@gerad.ca
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Abstract

We consider a two-player differential game of international emissions to represent the interactions between two groups of countries, namely, developed and developing countries. We adopt a broader-than-usual definition of environmental cost for developing countries to account for their evolving involvement in tackling environmental externalities. Cooperative and non-cooperative solutions are characterized and contrasted. We find that it may not be the best course of action to push developing countries to reduce their emissions in the short term, and that cooperation may not create enough dividend, also in the short term, to be implementable.

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Type
Research Article
Information
Environment and Development Economics , Volume 18 , Issue 6 , December 2013 , pp. 680 - 700
Copyright
Copyright © Cambridge University Press 2013 

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