Optimal charges on river effluent from lumped and distributed sources

We propose a modelling framework for the design of a Pigouvian effluent tax, in an environmental management problem implicating several economic agents located in a river basin. The proposed charging system allows for the agents' geographical position relative to the river's sections, at which environmental standards are to be enforced, and takes into account the possible different market structures within which the agents are operating. In particular, we consider industrial agents competing on an oligopolistic market, and a set of farmers acting as price takers on a large market. A regional authority's goal is to induce agents to some sort of cooperation which would result in the satisfaction of the common environmental constraints. The economic process on one side, and the pollution transport and accumulation on the other, constitute two dynamic processes in two different time scales. As the economic process is much slower than the other process we can neglect the latter's transients and concentrate on the time invariant steady state solutions to the transportation equation. The model thus constructed has some noncooperative game and optimal control problem's features with space being the ‘running’ variable. This revised version was published online in July 2006 with corrections to the Cover Date.     

A Metamodeling Approach for Integrated Assessment of Air Quality Policies

A method is proposed to build integrated models (also called Metamodels) aimed at quantifying the economic efficiency of air quality policies. This Metamodeling approach is based on the coupling of two complementary models, that operate at different scales in space and time, and which represent the economic and the physical and chemical processes, respectively. The joint consideration of the physico-chemical and techno-economic structure of the pollution control problems permits a comprehensive evaluation of air pollution abatement strategies. The motivating pollution control problems include urban-regional air quality management through efficient energy and traffic control policies. A pilot study, exploiting data collected in the Geneva canton (Switzerland), is used to demonstrate the potential of the approach.     

Advanced mathematical programming modeling to assess the benefits from international CO2 abatement cooperation

The aim of this paper is to propose a method for coupling national energy models, to identify the dividends of international cooperation in atmospheric pollution abatement and efficient energy use. It indicates, also, how to solve the resulting large‐scale multinational model. It simulates finally a cooperation of four European countries for curbing their carbon dioxide (CO₂) emissions.     

Assessing a Transition to 100% Renewable Power Generation in a Non-interconnected Area: A Case Study for La Réunion Island

Environmental Modeling & Assessment - In this paper, we present a comprehensive, multi-timescale approach to evaluate energy transition policies aiming at fully renewable generation in power...     

A Stochastic Dynamic Game of Carbon Emissions Trading

This paper proposes a computable stochastic equilibrium model to represent the possible competition between Russia and China on the international market of carbon emissions permits. The model includes a representation of the uncertainty concerning the date of entry of developing countries (e.g., China) on this market in the form of an event tree. Assuming that this date of entry is an uncontrolled event, we model the competition as a dynamic game played on an event tree and we look for a solution called S-adapted equilibrium. We compare the solution obtained from realistic data describing the demand curves for permits and the marginal abatement cost curves in different countries, under different market and information structures: (i) Russia's monopoly, (ii) Russia–China competition in a deterministic framework, (iii) Russia–China competition in a stochastic framework. The results show the possible impact of this competition on the pricing of emissions permits and on the effectiveness of Kyoto and post-Kyoto agreements, without a US participation.     

Integrated Assessment Modeling for Global Climate Change: An Infinite Horizon Optimization Viewpoint

In this paper one uses an infinite time horizon optimal control paradigm to deal with three important issues in global climate change integrated assessment, namely the equitable treatment of all the generations involved, the representation of technical progress, and the uncertainty concerning technological progress and climate change processes. The notion of economic sustainability is associated with the concept of turnpike in infinite horizon optimization models. The issue of deciding on the proper discount rate is addressed in this context and a method is proposed to reconcile long term sustainability and short term time preference for current generations. One also formulates a model where environmental damage and/or technical progress are represented as stochastic jump processes. One calls this random evolution a mode switching process. In this context, sustainability is represented by a family of turnpikes, and the economy will be driven from one steady state to the other as the modes switch. These concepts are illustrated on the DICE model and their possible implementation in other types of integrated assessment models is discussed.     

An Oligopoly Game of CDR Strategy Deployment in a Steady-State Net-Zero Emission Climate Regime

In this paper, we propose a simple oligopoly game model to represent the interactions between coalitions of countries in deploying carbon dioxide removal (CDR) strategies in a steady-state net-zero emission climate regime that could take place by the end of the twenty-first century. The emission quotas and CDR activities obtained in the solution of this steady-state model could then be used as a target for end-of-period conditions in a dynamic integrated assessment analysis studying the transition to 2100. More precisely, we analyze a steady-state situation where m coalitions exist and behave as m players in a game of supplying emission rights on an international emission trading system. The quotas supplied by a coalition must correspond to the amount of CO₂ captured through CDR activities in the corresponding world region. We use an extension of the computable general equilibrium model GEMINI-E3 to calibrate the payoff functions and compute an equilibrium solution in the noncooperative game.

     

Coupling climate and economic models in a cost-benefit framework: A convex optimisation approach

In this paper, we present a general method, based on a convex optimisation technique, that facilitates the coupling of climate and economic models in a cost-benefit framework. As a demonstration of the method, we couple an economic growth model à la Ramsey adapted from DICE-99 with an efficient intermediate complexity climate model, C-GOLDSTEIN, which has highly simplified physics, but fully 3-D ocean dynamics. As in DICE-99, we assume that an economic cost is associated with global temperature change: this change is obtained from the climate model, which is driven by the GHG concentrations computed from the economic growth path. The work extends a previous paper in which these models were coupled in cost-effectiveness mode. Here we consider the more intricate cost-benefit coupling in which the climate impact is not fixed a priori. We implement the coupled model using an oracle-based optimisation technique. Each model is contained in an oracle, which supplies model output and information on its sensitivity to a master program. The algorithm Proximal-ACCPM guarantees the convergence of the procedure under sufficient convexity assumptions. Our results demonstrate the possibility of a consistent, cost-benefit, climate-damage optimisation analysis with a 3-D climate model.