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Chinese Journal of Management Science ›› 2025, Vol. 33 ›› Issue (6): 289-299.doi: 10.16381/j.cnki.issn1003-207x.2022.0960

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A Study of Control Strategy about Transboundary Pollution under Emission Permit Trading and Competition Mechanism

Ming Zhang1(), Linzhao Xue2,3, Wenwen Wang3   

  1. 1.School of Economics and Management,China University of Mining and Technology,Xuzhou 221116,China
    2.School of Economics and Management,Wuhan University,Wuhan 430072,China
    3.School of Mathematics,China University of Mining and Technology,Xuzhou 221116,China
  • Received:2022-05-03 Revised:2022-10-22 Online:2025-06-25 Published:2025-07-04
  • Contact: Ming Zhang E-mail:zhangmingdlut@163.com

Abstract:

To deal with transboundary pollution problems in environmental treatment, a differential game model of transboundary pollution under emission permit trading and competition mechanism is proposed to explore the optimal strategies of oligopoly firms and evolution of local pollutant stocks. Under the optimal strategies, the conditions to the prices that contribute to achieve emission limit and pollution neutralization target are put forward and verified. The related properties of optimal value functions are analyzed. Subsequently, the differences in the emission abatement efforts of firms are revealed by comparing the optimal strategies under alliance and non-alliance scenarios. According to a numerical example, finally, the pollutant stocks and optimal value functions in regions are simulated. Based on the simulation, the effects of price and competition intensity of firms on the pollution stocks are studied. The conclusions show that: (1) the stock of pollutants in both regions is proportional to competitive intensity of local firms in the non-alliance scenario. At the same time, regions with a high proportion of transboundary pollution spillover have a stronger influence of competition intensity. (2) The stock of pollutants is significantly inversely proportional to price only in the non-alliance scenario. (3) Alliance game not only helps to reduce the total amount of pollutants in each region, but also has higher comprehensive benefits for firms, which is the ideal solution for controlling transboundary pollution.

Key words: market trading mechanism, competition mechanism, transboundary pollution, differential game, dynamic programming

CLC Number: