Transboundary Pollution and abatement

Abstract

Adopting clean technologies is a long term process which requires structural changes in production and consumption habits. In the present paper, we focus more on short term issues related to pollution reduction and analyze a pollution abatement game in a 2-country dynamic model. Transboundary pollution is treated as a common state variable while pollution reduction is reached via abatement rather than the adoption of cleaner technologies. Symmetric open-loop and Markovian Nash equilibrium are studied and compared as well as the analysis of Markovian strategies of more than two countries case around the steady state.