Transboundary pollution is pollution which is emitted in one country, and deposited or causing harm in another country. Due to the absence of a supranational institution that could enforce international legislation, transboundary externalities cannot be approached in the same way as domestic pollution problems. In an attempt to find non-traditional solutions to such crossborder problems, recent environmental economics literature incorporates behavioural assumptions with the help of game theory. This paper discusses how different types of transboundary pollution have been approached, and which static and dynamic game theoretic solution concepts have been evaluated. While full cooperation among countries yields the economically optimal outcome it is difficult to reach, because countries are faced with an inequitable sharing of the burden of pollution abatement and with the incentive to free-ride. Side payment schemes to aid burden sharing and strategies to circumvent free riding are reviewed. Issues such as transaction costs, information and motivation are briefly discussed.
Since the adoption of the Climate Convention in 1992 at the latest, formerly communist countries have been following the climate debate despite serious domestic economic and social problems. Since 1990 the region has contributed the most to curbing the problem of climate change, albeit accidentally, through the sharp decline in their emissions in parallel with the decline in their economies. In this paper we review the role played by the economies in transition in the climate negotiations until early 2000, especially in light of the 1997 Kyoto Protocol to the Climate Convention. We consider emissions trends and the scope for further emissions reductions. Subsequently, the potential benefits of the “Kyoto Mechanisms”, which include emissions trading, joint implementation, and the Clean Development Mechanism, are discussed. We find that the climate policies in Central and Eastern Europe and in the former Soviet Union are drifting further apart. Activities in Central and Eastern Europe are dominated by the EU accession process, while the countries further east continue to grapple with economic crises.
China has been the world's second largest carbon emitter for years. Recent studies show that China had overtaken the U.S. as the world's largest emitter in 2007. This has put China on the spotlight, just at a time when the world community starts negotiating a post-Kyoto climate regime under the Bali Roadmap. China seems to become such a Christmas tree on which everybody can hang his/her complaints. This paper will first discuss whether such a critics is fair by examining China's own efforts towards energy saving, the widespread use of renewable energy and participation in clean development mechanism. Next, the paper puts carbon reductions of China's unilateral actions into perspective by examining whether the estimated greenhouse gas emission reduction from meeting the country's national energy saving goal is achieved from China's unilateral actions or mainly with support from the clean development mechanism projects. Then the paper discusses how far developing country commitments can go in an immediate post-2012 climate regime, thus pointing out the direction and focus of future international climate negotiations. Finally, emphasizing that China needs to act as a large and responsible developing country and take due responsibilities and to set a good example to the majority of developing countries, the paper articulates what can be expected from China to illustrate that China can be a good partner in combating global climate change. JEL classification: Q42; Q48; Q53; Q54; Q58
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