Conflicts and Cooperation in Managing Environmental Resources

341 Pages·1992·8.598 MB·English

by  Professor Dr. Rüdiger Pethig (auth.), Professor Dr. Rüdiger Pethig (eds.)

Microeconomic Studies
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Edited by Gtith, J. McMillan and H.-W.Sinn
Microeconomic Studies
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Rudiger Pethig (Ed.)
Conflicts and
Cooperation in Managing
Environmental Resources
With 46 Figures
Springer-Verlag
Berlin Heidelberg New York
London Paris Tokyo
Hong Kong Barcelona
Budapest
Professor Dr. RUDIGER PETHIG
Fachbereich Wirtschaftswissenschaften
Universitiit Gesamthochschule Siegen
HOlderlinstr.3
D-5900 Siegen, FRG
ISBN-13: 978-3-642-46767-7 e-ISBN-13: 978-3-642-46765-3
DOl: 10.1007/978-3-642-46765-3
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© Springer-Verlag Berlin· Heidelberg 1992
Softcover reprint of the hardcover 1s t edition 1992
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Preface
This volume contains the proceedings of a conference at Freudenberg, Germany, that
brought together some forty (environmental) economists from seven European countries
and the U.S. in November 1990 to analy:se "Conflicts and Cooperation in Managing
Environmental Resources". I should like to thank the Volkswagen-Stiftung whose finan
cial support made this conference possible. Additional funding by the Forschungsinstitut
fur Geistes- und Sozialwissenschaften at the Universitiit - Gesamthochschule Siegen is
also gratefully acknowledged.
The papers and formal comments published in this volume emerged from those
presented at Freudenberg. Thorough and competent discussions during and after the
conference as well as an anonymous reviewing process led to major revisions which im
proved the quality of all contributions. I am grateful to the authors for their construc
tive collaboration before and during the conference as well as during the editing process.
The authors demonstrated convincingly that they are not only able to scrutinise the
inefficiencies of non-eooperation in their research work, but that they also succeeded to
learn this lesson by avoiding delays of the editing process at the expense of the remain
ing players.
My special thank is due to Klaus Fiedler, Rainer Hickmann, Peter Marx, Ute
Milller, Michael Rapp,Ekkehard Seiler, Uwe Seja and Monika Siebel for their devoted
effort in supporting the organisation of the conference and/or the editing of this proceed
ings volume. It is my pleasure to forward to them a large share of the participants' u
nanimous praise of the stimulating and enjoyable research atmosphere of the Freuden
berg conference.
Siegen, August 1991 Rudiger Pethig
CONTENTS
Preface v
Editor's Introduction 1
PART 1: INTERNATIONAL DIMENSIONS
Chapter 1
International Environmental Agreements as Games
SCOTT BARRETT
1. Introduction 11
2. Reaching agreement 13
2.1. Identical countries 19
2.2. Cost differences 21
2.3. Benefit differences 24
2.4. Choice of a benchmark 25
2.5. Summary 26
3. Sustaining agreement 27
Appendix 32
References 35
Comments by HENK FOLMER 36
Chapter 2
Emission Taxes a Dynamic International Game of CO
10 2
Emissions
MICHAEL HOEL
1. Introduction 39
2. A static game 41
3. A dynamic game 45
VIII
4. The open loop equilibrium without taxes 50
5. The Markov perfect equilibrium without taxes 53
6. Other subgame perfect equilibria 63
7. Pigouvian taxes 64
8. Non-commitment and taxation 66
References 67
Comments by OTTO KECK 68
Chapter 3
Critical Loads and International Environmental Cooperation
KARL-GORAN MALER
1. Critical loads 71
2. Naive interpretations 72
3. Stock of pollutants - the case of one country 75
4. Stock of pollutants - several countries and the open loop equilibrium 77
5. Closed loop or feed back equilibria 79
References 81
Comments by HENRY TULKENS 81
Chapter 4
Environmental Conflicts and Strategic Commitment
JASON F. SHOGREN, KYUNG H. BAlK, and THOMAS D. CROCKER
1. Introduction 85
2. Analytical framework 87
3. Asymmetric players and endogenous strategic timing 89
4. N players and strategic team formation 94
5. Conclusion 104
References 106
Comments by DETLEV HOMANN 107
IX
Chapter 5
The Choice of Environmental Policy Instruments and Strategic
International Trade
ALISTAIR ULPH
l. Introduction 111
2. The model 113
3. Single stage Cournot model 114
4. Two stage Stackelberg model 117
5. Two stage Cournot model 121
6. Conclusions 127
References 128
Comments by MARJI LINES 129
Chapter 6
Economic Models of Optimal Energy Use under Global Envi
ronmental Constraints
HANS W. GOTTINGER
Part 1: The C02 Problem in Basic Models of Optimal Use of Fossil Fuels
l. Introduction 134
2. Background problem on climatic change and global environmental
constraints 135
3. Economic studies on the CO2 problem 138
4. Preliminary definitions and the general model 141
5. A simplified model 143
5.l. Necessary conditions 145
5.2. Sufficient conditions 147
5.3. Definition and optimality of equilibrium 148
5.4. lllustration by a phase plane diagram 150
6. A discrete type impact of C02 emissions 151
7. Further specification of the model 155
8. Discussion 157
x
Part 2: Technical Change, International Co-operation, and Structural Uncertainty
9. Introduction 159
10. A taxonomy of technical change 160
11. Neutral technical change in a general model 162
12. International co-operation 165
13. Structural uncertainty 169
13.1. Modelling uncertainty about critical CO2 levels as uncertainty
about a critical, limited natural resource 170
13.2. Treating structural uncertainty 172
13.3. Numerical calculations 175
14. Conclusions and perspectives 176
Appendix A: Existence and Uniqueness of the Optimal Solution 178
Appendix B: Existence and Stability of Equilibrium 179
References 181
Comments by OSKAR VON DEM HAGEN 183
Comments by CEES WITHAGEN 188
PART2: MONITORING AND ENFORCEMENT
Chapter 7
Monitoring and Enforcement of Pollution Control Laws in Eu
rope and the United States
CLIFFORD S. RUSSELL
1. Introduction 196
2. Differences among monitoring and enforcement problems and systems 198
3. Key dimensions of monitoring and enforcement systems 201
3.1. Probability of monitoring 202
3.2. Surprise 203
3.3. Definition of a violation 204
3.4. Penalties and other responses to violations 204
4. Some evidence on European & U.S. choices in monitoring & enforcement 205
5. A glimpse of the future? Recommendations from the U.K.
(The "Kinnersley Report") 208
XI
6. Concluding comments 210
Appendix 211
References 212
Comments by HEINZ WELSCH 213
Chapter 8
The Economics of Negotiations on Water Quality - An Appli
cation of Principal Agent Theory
WOLFGANG J. STROBELE
1. Introduction 221
2. The basic model structure of a modified LEN-model 225
3. The basic model with a beta-distribution of water quality depending
on abatement intensity 229
4. Possible extensions 234
References 235
Comments by GUNTHER KNIEPS 236
Chapter 9
Monitoring the Emission of Pollutants by Means of the Inspec
tor Leadership Method
RUDOLF AVENHAUS
1. Monitoring point sources of pollution 241
2. Decision theoretical formulation of the problem 244
3. Comparison of the solutions of the simple 'simultaneous' and
'leadership' games 247
4. The general inspector leadership game and the Neyman -Pearson lemma 253
5. Application 257
6. Concluding remarks 260
Appendix 261
References 267
Comments by TILL REQUATE 269