The Timing and Strategic Role of Self-Protection |
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Authors: | Ficre Zehaie |
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Institution: | 1.Department of Economics,Swedish University of Agricultural Sciences,Uppsala,Sweden |
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Abstract: | Self-protection has private goods characteristics as it reduces own exposure to pollution given a certain level of pollution.
We study the effect of timing self-protection before, after or simultaneously with abatement. We find that self-protection
when timed before abatements has strategic effects. In this case self-protection, shifts the second stage subgame perfect
Nash equilibrium of abatements such that own contributions of abatement are decreased and those of the other country are increased.
Thereby shifting future abatement costs to the other country. When countries cooperate only on abatement, the incentives to
shift future abatement costs are greater. Contrary to, intention, cooperation on abatement may in fact worsen environmental
quality if it does not include self-protection. |
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