Coordinating Carbon Emissions via Production Quantities: A Differential Game Approach

Production emissions in the industrial sector are a major source of environmental pollution. In this paper, we explore how emission considerations integrated with production decisions. We develop dynamic model consisting two firms located same park, which satisfies exogenously given demands separate markets. The can build up or rundown stocks (full backlogging), both costly. cost depends on total output firms. Nash equilibrium feedback strategies, where each firm decides its based inventory inventories both. also social planning solution decisions centralized. present analytic results for profits these settings. show benefits decentralized approach over centralized one, provided there is mechanism coordination. Finally, costs compared various concepts.