Equilibrium Analysis of Upstream and Downstream Enterprises in the Emissions Trading Based on the Model of Treatment Costs

Abstract:

This article saw upstream and downstream enterprises in the same watershed as two overalls.Firstly, created a mathematical programming model of pollution control costs and upstream and downstream enterprises’ emissions reductions.Harnessed the method which solved the feasible solutions of the vector optimization problems meeting Kuhn-Tucker conditions to calculate two companies’ marginal treatment costs and put them as the market price of emission rights trading.Then created two companies’ benefit functions and found their Nash equilibrium outputs and incomes.Next analyzed the impacts of the emission trading price on two companies’ equilibrium and calculated the specific range of price parameter.Finally, gets the conclusion that only a reasonable emission trading price can lead to rational resources allocation.

• Periodical: Advanced Materials Research (Volumes 1010-1012)
• Pages: 742-747
• DOI: https://doi.org/10.4028/www.scientific.net/AMR.1010-1012.742
• Online since: August 2014
• Authors: Ying Zhou*, Yan Ping Chen
• Keywords: Emission Rights, Nash Equilibrium, Treatment Costs

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