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Carbon capture and storage and transboundary pollution: a differential game approach. (English) Zbl 1304.91047

Summary: We study the strategic behavior of two countries facing transboundary \(\mathrm{CO}_2\) pollution under a differential game setting. In our model, the reduction of \(\mathrm{CO}_2\) concentration occurs through the carbon capture and storage process, rather than through the adoption of cleaner technologies. Furthermore, we first provide the explicit short-run dynamics for this dynamic game with symmetric open-loop and a special Markovian Nash strategy. Then, we compare these strategies at the games’ steady states and along some balanced growth paths. Our results show that if the initial level of \(\mathrm{CO}_2\) is relatively high, state dependent emissions reductions can lead to higher overall environmental quality, hence, feedback strategy leads to less social waste.

MSC:

91A80 Applications of game theory
91B76 Environmental economics (natural resource models, harvesting, pollution, etc.)
91A23 Differential games (aspects of game theory)
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