Global Emission Ceiling Versus International Cap and Trade: What is the Most Efficient System to Solve the Climate Change Issue?

摘要: We model the climate change issue as a pollution control game with purpose of comparing two possible departures from business usual (BAU) where countries noncooperatively choose their emission levels. In first scenario, players have to agree on global cap (GEC) that is enforced by uniform taxation scheme. They still behave strategically when choosing levels but are now subject coupled constraint imposed cap. The second scenario consists implementation an international and trade (ICT) system. this case, decide quotas, trading allowed. A three heterogenous player quadratic serves basis for analysis. When binding, among all constraints Nash equilibria, we select particular normalized equilibrium solving variational inequality. Comparing equilibria BAU ICT, show if appropriately chosen, then GEC system improves players’ payoffs, relative BAU. may thus be unanimously approved whereas ICT not, because moving costly one player. Second, some values cap, get higher payoff under than ICT. Therefore, outperforms both in terms feasibility efficiency.