Our research examines a permit trading system where all countries participate to achieve a long-term greenhouse gases (GHG) stabilization target. Our main objective is to propose allocation schemes that lead to a fair distribution of net abatement costs among world regions. These costs are good indicators of the need to emit of regions and their opportunities to abate, two criteria that are int...

The implications of the propagation of uncertainty for the e ciency of stochastic water pollution control were analyzed. The empirical analysis focused on nitrogen pollution of the Baltic Sea from Swedish crop farms. A two moment model (mean and variance) of the distribution of coastal load was developed and integrated with an economic model of arable land-use choice. It was shown that uncertai...

In this paper we consider a dynamic nonzero-sum game between the polluting firms and the authorities. Although the proposed game is not easily solvable for the feedback case, i.e., it is not the linear quadratic case of game and not a degenerated case, we calculate explicitly a stationary feedback equilibrium. In the proposed game the regulator has the ability to turn the optimal allocation of ...

This paper estimates the Marginal Abatement Cost Curve (MACC) of CO2 emissions in China based on a provincial panel for the period of 2001-2010. The provincial marginal abatement cost (MAC) of CO2 emissions is estimated using a parameterized directional output distance function. Four types of model specifications are applied to fit the MAC-carbon intensity pairs. The optimal specification contr...

To keep the workload within limits choices are made. The viscosity and also the challenge of the research on the implementation of the MWID’s is found in the multiplicity of the regulated substances and the multiple technology options for abatement. An abatement line is mostly composed of two or more steps. Most steps abate more than one substance. The distinguishable steps are interrelated and...

This paper addresses the timing of the use of biological carbon sequestration and its capacity to alleviate the carbon constraint on the energy sector. We constructed a stochastic optimal control model balancing the costs of fossil emission abatement, the opportunity costs of lands allocated to afforestation, and the costs of uncertain climate damages. We show that a minor part of the sequestra...

Climate policy poses a dilemma for environmental economists. The economic argument for stringent GHG abatement is far from clear. There is disagreement among both climate scientists and economists over the likelihood of alternative climate outcomes, over the nature and extent of the uncertainty over those outcomes, and over the framework that should be used to evaluate potential benefits from G...

Climate policy poses a dilemma for environmental economists. The economic argument forstringent greenhouse gas (GHG) abatement is far from clear. There is disagreement amongboth climate scientists and economists concerning the likelihood of alternative climateoutcomes, the nature and extent of the uncertainty of those outcomes, and the frameworkthat should be used to evaluate po...

Firms are generally reluctant to reveal their true marginal costs for environmental abatement. Depending upon the policy instruments used by the regulator, firms may even seek to misrepresent their abatement costs in order to gain a competitive advantage. This paper shows how the regulator can induce truth revealing behavior by firms in the emission permit market. The aggregate optimal emission...