Original scientific paper
https://doi.org/10.1080/1331677X.2018.1515642
Cost allocation for the problem of pollution reduction: a dynamic cooperative game approach
Muhammad Luqman
; The Center for Economic Research, Shandong University, Jinan, P.R. China
Sui Peng
; The Center for Economic Research, Shandong University, Jinan, P.R. China
Shaoan Huang
; The Center for Economic Research, Shandong University, Jinan, P.R. China
Amina Bibi
; School of Mathematical Sciences, Ocean University of China, Qingdao, P.R. China
Ahmad Najid
; School of Business, Hunan University of Science and Technology, Xiangtan, P.R. China
Abstract
This paper studies CO2 emissions at a global level. The authors
use Dynamic Optimisation to derive the minimum penalty cost
on countries every single time. They then use an Imputation
Distribution Procedure to allocate the minimum penalty cost
among countries. Their work provides the extension of the
Shapley value cost allocation as a penalty to reduce CO2 emissions. The paper has implications for how to provide initiatives to
improve cooperation on reducing CO2 emissions at an international level. Results show that a reduction in cost of only one
country can be harmful for other countries. In this way, some
countries can end up or worse off in a case where all countries
experience a uniform decrease in their penalty cost. Therefore,
the findings of this work suggest a low penalty-cost scenario that
helps the countries fight for pollution reduction and provide fruitful links for policy-makers. They show that the Clean
Development Mechanism (CDM) of the Kyoto Protocol could be
implemented by the Shapley value cost allocation.
Keywords
Pollution; climate change; cooperative game; Shapley value; cost sharing
Hrčak ID:
217012
URI
Publication date:
3.12.2018.
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