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Game theoretic analysis for carbon emission permits trading among multiple world regions with an optimizing global energy model
Author(s) -
Akimoto Keigo,
Matsunaga Atsushi,
Fujii Yasumasa,
Yamaji Kenji
Publication year - 2000
Publication title -
electrical engineering in japan
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.136
H-Index - 28
eISSN - 1520-6416
pISSN - 0424-7760
DOI - 10.1002/(sici)1520-6416(20000430)131:2<40::aid-eej5>3.0.co;2-0
Subject(s) - greenhouse gas , emissions trading , order (exchange) , reduction (mathematics) , game theory , shadow price , environmental economics , payment , carbon fibers , global warming , energy (signal processing) , business , computer science , economics , natural resource economics , microeconomics , climate change , finance , mathematical optimization , mathematics , statistics , algorithm , composite number , ecology , geometry , biology
Carbon emissions which would cause global warming were agreed to be constrained at COP3 in Kyoto. In addition, carbon emission permits trading was also approved to be introduced. The emission permits trading is expected to achieve efficient carbon emission reduction, equalizing the marginal costs of the emission reduction for the participating countries. In other words, the permits trading allows participants to reduce emissions where it is least expensive to do so. However, the inadequate introduction of the trading systems may impose an unfairly greater burden on some countries, and therefore careful evaluation of the system would be indispensable for its implementation. In this paper, we attempt to analyze emission permits trading, using the theory of cooperative games with a global energy model of optimization type. We assume that seven world regions as players participate in the permits trading system under the condition of the emission reduction target presented at COP3 and so on, and show the nucleolus of the grand coalition games, and the computational results of primary energy supplies and CO 2 shadow prices. The insights of this research indicate that in order to stabilize the grand coalition, a noticeable amount of additional transfer of money would be needed besides the payments associated with the emission permits transactions. © 2000 Scripta Technica, Electr Eng Jpn, 131(2): 40–50, 2000