Greenhouse Gases, Cooperation, and Exchange
Abstract
Emission of uniformly dispersed greenhouse gases is construed here as a cooperative production game, featuring side-payments, quota exchange, uncertainty, and multi-period planning. Stochastic programming offers good instruments to analyze such games. "Absent" efficient markets for emissions, such programming may help to imitate market-like, price-based transfers among concerned parties. "Present" appropriate markets, it may predict equilibrium outcomes. In both cases, shadow values of aggregate emissions define side-payments or prices that yield core solutions.