Strategic Interactions and Uncertainty in Decisions to Curb Greenhouse Gas Emissions

Insley, Margaret; Snoddon, Tracy

doi:10.2139/ssrn.3189506

Cited by 2 publications

(7 citation statements)

References 43 publications

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“…A summary of variable names is given in Table 1. The problem formulation is similar to that described in Insley, Snoddon and Forsyth (2019), but is repeated here for completeness of the paper.…”

Section: Problem Formulationmentioning

confidence: 99%

“…Given that emissions are no longer damaging at time T (assuming complete carbon capture and storage), the maximum possible emission level is chosen for the boundary condition. Further discussion regarding these boundary conditions can be found in Insley, Snoddon and Forsyth (2019).…”

Section: Dynamic Programming Solutionmentioning

confidence: 99%

“…We note that in the model studied in this paper, the diffusion tensor is not of full rank, and hence we cannot necessarily expect Nash equilibria to exist. Insley, Snoddon and Forsyth (2019) develop a sequential pollution game model to address the specific circumstances of climate change. The model depicts two players, each being a large contributor to global carbon emissions.…”

Section: Introductionmentioning

confidence: 99%

“…The results of Insley, Snoddon and Forsyth (2019) indicated a classic tragedy of the commons whereby player utility is lower than would be achieved by a Social Planner seeking to maximize the sum of player utilities. Players in the game choose emission levels that are too high relative the levels chosen by a Social Planner.…”

Section: Introductionmentioning

confidence: 99%

“…The paper also demonstrates the importance of temperature volatility and asymmetric damages and preferences on optimal choices. Insley, Snoddon and Forsyth (2019) do not impose the requirement that optimal strategies represent Nash equilibria. However it is possible to check for the existence of Nash equilibrium at every time step for all possible values of the state variables.…”

Section: Introductionmentioning

confidence: 99%

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Climate Games: Who’s on First? What’s on Second?

Insley

2021

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We study four different climate change games and compare with the outcome of choices by a Social Planner. In a dynamic setting, two players choose levels of carbon emissions. Rising atmospheric carbon stocks increase average global temperature which damages player utilities. Temperature is modelled as a stochastic differential equation. We contrast the results of a Stackelberg game with a game in which both players act as leaders (a Leader-Leader, or Trumpian game). We also examine an Interleaved game where there is a significant time interval between player decisions. Finally we examine a game where a Nash equilibrium is chosen if it exists, and otherwise a Stackelberg game is played. One or both players may be better off in these alternative games compared to the Stackelberg game, depending on state variables. We conclude that it is important to consider alternate game structures in examining strategic interactions in pollution games. We also demonstrate that the Stackelberg game is the limit of the Interleaved game as the time between decisions goes to zero.

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Section: Problem Formulationmentioning

confidence: 99%

Section: Dynamic Programming Solutionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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