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A Game of International Climate Policy Solved by a Homogeneous Oracle-Based Method for Variational Inequalities

  • Laurent Drouet
  • Alain Haurie
  • Jean-Philippe Vial
  • Marc Vielle
Chapter
Part of the Annals of the International Society of Dynamic Games book series (AISDG, volume 11)

Abstract

This paper presents a game-theoretic model for the international negotiations that should take place to renew or extend the Kyoto protocol beyond 2012. These negotiations should lead to a self-enforcing agreement on a burden sharing scheme to realize the necessary global emissions abatement that would preserve the world against irreversible ecological impacts. The model assumes a noncooperative behavior of the parties except for the fact that they will be collectively committed to reach a target on cumulative emissions by the year 2050. The concept of normalized equilibrium, introduced by J.B. Rosen for concave games with coupled constraints, is used to characterize a family of dynamic equilibrium solutions in an m-player game where the agents are (groups of) countries and the payoffs are the welfare gains obtained from a Computable General Equilibrium (CGE) model. The model is solved using an homogeneous version of the oracle-based optimization engine (OBOE) permitting an implicit definition of the payoffs to the different players, obtained through simulations performed with the global CGE model GEMINI-E3.

Keywords

Nash Equilibrium Variational Inequality Computable General Equilibrium Marginal Abatement Cost Cumulative Emission 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  • Laurent Drouet
    • 1
  • Alain Haurie
    • 2
  • Jean-Philippe Vial
    • 3
    • 4
  • Marc Vielle
    • 5
    • 6
  1. 1.Resource Centre for Environmental Technologies, Public Research Centre Henri TudorTechnoport SchlassgoartEsch-sur-AlzetteLuxembourg
  2. 2.ORDECSYSChêne-BougeriesSwitzerland
  3. 3.University of GenevaGenevaSwitzerland
  4. 4.ORDECSYSChêne-BougeriesSwitzerland
  5. 5.École Polytechnique Fédérale de Lausanne and C-ORDEEEcublensFrance
  6. 6.Toulouse School of Economics (LERNA)TSE - Manufacture de TabacsToulouseFrance

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