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.


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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