We analyze a transboundary pollution differential game where pollution control is spatially distributed among a number of agents with predetermined spatial relationships. The analysis emphasizes, first, the effects of the different geographical relationships among decision makers; and second, the strategic behaviour of the agents. The dynamic game considers a pollution stock (the state variable) distributed among one large region divided in subregions which control their own emissions of pollutants. The emissions are also represented as distributed variables. The dynamics of the pollution stock is defined by a parabolic partial differential equation. We numerically characterize the feedback Nash equilibrium of a discrete-space model that still captures the spatial interactions among agents. We evaluate the impact of the strategic and spatially dynamic behaviour of the agents on the design of equilibrium environmental policiesThis research is partially supported by MINECO under projects MTM2013-42538-P, MTM2016-78995-P (AEI) (first author) and ECO2014-52343-P (second author), co-financed by FEDER funds. The authors thank the support of European Cooperation in Science and Technology through COST Action IS1104, ``The EU in the new complex geography of economic systems: models, tools and policy evaluation"
