Book Summary of Conflicts and Cooperation in Managing Environmental Resources by R. Pethig, ed.

Conflicts and Cooperation in Managing Environmental Resources, ed. R. Pethig, (New York: Springer-Verlag, 1992), 332 pp.

Conflicts and Cooperation in Managing Environmental Resources is an examination of the international dimensions of environmental resources and the monitoring and enforcement of agreements regarding same.

Conflicts and Cooperation in Managing Environmental Resources is a collection of the work of multiple authors and will be of interest to the reader interested in an in-depth analysis of game theory as applied to international agreements about shared environmental resources. The book is divided into two section, the first of which addresses the international dimensions of common environmental resources. The second section discusses the monitoring and enforcement of agreements which have been reached concerning the management of these shared resources.

Section one is divided into six chapters, each by a different author. The first chapter addresses international agreements as games. Scott Barrett considers the identification of similarities between countries, cost benefit differences between countries and the choice of a benchmark around which to structure an agreement. He closes the chapter by offering a formulation for the sustaining of any agreements reached. Barrett's chapter is followed, as is each chapter, by a commentary by a different author. The second chapter is entitled "Emission Taxes in a Dynamic International Game of CO2 Emissions". Michael Hoel discusses both the game and taxes components of international agreements about CO2 emissions. In the former category, he addresses the components of both static and dynamic games and other subgame perfect equilibria. Hoel addresses the Markov perfect equilibrium without taxes as well as Pigouvian taxes. Finally, the author addresses the open loop equilibrium without taxes and non-commitment and taxation.

Chapter three examines critical loads and international environmental cooperation. Toward this end Karl-Göran Mäler discusses: naive interpretations, case studies of several countries' stock of pollutants and the open loop equilibrium. Finally, he considers both closed loop and feed-back equilibria. Chapter four addresses environmental conflicts and strategic commitment. The multiple authors offer an analytical framework and consider asymmetric players and endogenous strategic timing. The next chapter in section one considers the choice of environmental policy instruments and strategic international trade. Alistair Ulph examines three models: a single stage Cournot model, a two stage Stackelberg model, and a two stage Cournot model. The final chapter in this section is a lengthy one which examines economic models of optimal energy use under global environmental constraints. The first part of this chapter offers an in-depth examination of the CO2 problem and the basic models of optimal use of fossil fuels. The second part considers technical change, international cooperation, and structural uncertainty. The chapter is followed by two appendices.

Section two of the book discusses the monitoring and enforcement of agreements. The first of four chapters considers the monitoring and enforcement of pollution control laws in Europe and the United States. Clifford S. Russell examines the differences among monitoring and enforcement problems and systems and the key dimensions of those systems. He also offers recommendations from the U. K. in the form of the Kinnersley Report. Chapter eight addresses the economics of negotiations on water quality as an application of principal agent theory. The author offers a basic model and possible extensions. The penultimate chapter is an examination of the monitoring of the emission of pollutants by means of the inspector leadership method. Rudolf Avenhaus discusses the monitoring of point sources of pollution. Primarily, the chapter deals with a comparison of the solutions of two distinct game theory approaches. The final chapter offers a signaling game approach to illegal pollution and monitoring of unknown quality. The first part of this chapter examines the equilibrium scenarios with pooling and signaling behavior wherein the game model is presented. The second part of the chapter discusses perfect equilibria and solutions via equilibrium selection.

Conflicts and Cooperation in Managing Environmental Resources requires a working knowledge of both mathematical models and game theory. The text is heavily supported by figures and mathematical formulations which will assist the knowledgeable reader.