- KUZNETS CURVE AND TRANSBOUNDARY POLLUTION.

This work presents a clearer way of solving the optimisation problem addressed by Selden and Song (1995)in order to derive the J curve for abatement. The proposed framework is also extended to a two-country model.Results are consistent, also for the two country case, with empirical evidence that shows a positive relationshipbetween environmental quality and economic growth for high income levels. A static comparative analysiscon¿rms that the smaller the rate of discount and/or the less polluting a technology is, the higher the steadystate stock of capital will b e. Moreover, the lack of coop eration is proved to result in smaller e¤ orts to abateemissions. Este trabajo presenta una forma más clara de resolver el problema deoptimización planteado por Selden y Song (1995) con el fin de obtener la curva en J para lasactividades de control de la contaminación. El esquema propuesto se extiende también a unmodelo de dos países. Los resultados son consistentes, también para el caso de dos países,con la evidencia empírica que muestra una relación positiva entre calidad medioambiental ycrecimiento económico para niveles altos de renta. Un análisis de estática comparativa confirmaque cuanto menor es la tasa de descuento y/o menos contaminante la tecnología utilizada,mayor será el stock de capital de estado estacionario. Además, se comprueba que la ausenciade cooperación se traduce en menores esfuerzos por controlar las emisiones.calidad medioambiental, crecimiento económico, control de la contaminación environmental quality, growth, pollution abatement

Strategic behavior and efficiency in a groundwater pumping differential game

In this paper socially optimal and private exploitation of a common property aquifer are compared. Open-loop and feedback equilibria in nonlinear strategies have been computed to characterize the private solution. The use of these two equilibrium concepts aIlows us to distinguish between cost and strategic externalities. The open-Loop solution captures only the cost externality, whereas the feedback solution captures both externalities. The results show that strategic behavior increases the overexploitation of the aquifer compared to the open-loop solution. However, if the groundwater storage capacity is large, the difference between the socIally optImal and private exploitation, characterized by a feedback equilibrium, is negligible and can be ignored for practical purposes. En este trabajo se comparan la explotación privada y socialmente óptima de un acuífero de propiedad común. Para caracterizar la solución privada se han calculado los equilibrios' openloop' y 'feedback' en estrategias no lineales. El uso de estos dos conceptos de equilibrio nos ha permitido distinguir entre efectos externos estratégicos y de coste. La solución 'open-loop' captura solamente el efecto externo de los costes mientras que la SolucIón 'feedback' captura ambos efectos externos. Los resultados muestran que el comportamiento estratégico aumenta la sobreexplotación del acuífero comparado con la solución 'open-loop' o Sin embargo, si la capacidad de almacenamiento del acuífero es grande, la diferencia entre la explotación privada y la socialmente óptima, caracterizada por un equilibrio 'feedback', es despreciable y puede Ignorarse para propósitos prácticos.Explotación de aguas subterráneas, recursos de propiedad común, efecto externo estratégico, juegos diferenciales, solución 'feedback', estrategias no lineales Groundwater exploitation, common property resources, strategic externality, differential games, feedback solution, nonlinear strategies

International cooperation in pollution control

In this paper the profitability and stability of an International Environmental Agreement among N identical countries that emit a pollutant are studied using a standard quadratic net benefit function. The static analysis shows that only a bilateral agreement could be self-enforcing independently of the number of countries affected by the externality and the gains coming from cooperation. It is also shown that this result occurs both when the coalition takes as given the emissions of nonsignatories and when it acts as the leader of the game. In the second part of the paper a differential game is proposed in order to analyze the stock externality due to accumulated emissions. Similar results to the ones obtained for the static model are derived both for an open-loop Nash equilibrium and for a feedback Nash equilibrium in linear strategies

Self-enforcing international environmental agreements with a stock pollutant

In this paper the stability of an International Environmental Agreement (IEA) among N identical countries that emit a pollutant are studied using a two-stage game. In the first stage each country decides noncooperatively whether or not to join an IEA, and in the second stage signatories jointly against nonsignatories determine their emissions in a dynamic setting defined in continuous time. A numerical simulation shows that a bilateral coalition is the unique self-enforcing IEA independently of the gains coming from cooperation and the kind of strategies played by the agents (open-loop or feedback strategies). We have also studied the effects of a minimum participation clause finding that for this case a self-enforcing IEA just consists of the number of countries established in the clause. Copyright Springer-Verlag Berlin/Heidelberg 2005International environmental agreements, Stock externalities, Differential games, Open-loop Nash equilibrium,