Selected papers presented at the NATO Advanced Research Workshop "The Economics of Atmospheric Pollution, Theories, Applied Models and Implications for International Policy Making", held in Wageningen, The Netherlands, November 16-18, 1994

1 On the Economics of Atmospheric Pollution.- 1.1 Introduction.- 1.2 Background of atmospheric pollution.- 1.3 Economic problems related to atmospheric pollution.- 1.4 Policy instruments.- 1.5 Modeling and methodologies.- 1.6 Cooperation or free riding?.- 1.7 The structure of the book.- 1.8 Conclusions.- 2 Uncertainty, Learning, Stock Externalities and Capital Irreversibilities.- 2.1 Introduction.- 2.2 A simple model of irreversibilities.- 2.3 Sunk costs and stock externalities.- 2.4 Conclusions.- 3 Who Gains from Learning about Global Warming?.- 3.1 Introduction.- 3.2 The model.- 3.3 Reversible emissions.- 3.4 Irreversible emissions.- 3.5 Numerical results.- 3.6 Conclusions.- 4 Voluntary Supply of Greenhouse Gas Abatement and Emission Trading Equilibria.- 4.1 Introduction.- 4.2 Preferences, noncooperative and cooperative equilibria.- 4.3 Noncooperative solution with competitive emission trading.- 4.4 Some properties of the noncooperative Competitive Emission Trading Equilibrium.- 4.5 Noncooperative solution with monopsonistic emission abatement trade.- 4.6 Empirical illustration.- 4.7 Conclusion.- 5 On the Efficiency of Green Tax Reforms to Reduce CO2 Emissions.- 5.1 Introduction.- 5.2 The model.- 5.3 First-best analysis.- 5.4 Second-best analysis.- 5.5 Some remarks on the relevance.- 5.6 Conclusion.- 6 Analytic Solutions of Simple Optimal Greenhouse Gas Emission Models.- 6.1 Introduction.- 6.2 A Greenhouse Gas Emission Reduction Model.- 6.3 Expected Value of Perfect Information EVPI.- 6.4 Numerical example.- 6.5 Conclusion.- 7 The Design of Cost Effective Ambient Charges under Incomplete Information and Risk.- 7.1 Introduction.- 7.2 Deterministic pollution control.- 7.3 An artificial market mechanism.- 7.4 Stochastic models.- 7.5 Adjustment mechanism.- 7.6 Numerical results.- 7.7 Conclusion.- 8 An Economic Approach to Ozone Abatement in Europe.- 8.1 Ozone problem: background.- 8.2 Basic ozone economics.- 8.3 Conclusions.

This book contains a selection of papers that have been prepared for the NATO Advanced Research Workshop on the Economics of Atmospheric Pollution, that took place in Wageningen, The Netherlands, November 1994, hosted by Wageningen Agricultural University and sponsored by NATO Scientific and Environmental Affairs Division. Participants from the USA and a large number of countries in Western, Central and Eastern Europe have participated to discuss the economic aspects of transboundary air pollution and climate change. A number of selected papers have been reviewed and revised on the basis of the comments provided. The editors kindly acknowledge the support of Prof. Charles Kolstad, University of California, Santa Barbara, and Prof. Stef Proost, Center for Economic Studies, Catholic University Leuven, for reviewing several chapters of the book. Also the assistance of several anonymous reviewers is kindly acknowledged. We hope that the book will contribute to a better understanding of the most relevant issues in the area of international policymaking on transboundary pollution and climate change, and that it contributes to further economic analysis in this interesting research area. The topic of transboundary pollution related to climate change, acidification and tropospheric ozone will in the coming decades continue to be relevant for all countries in the world. Ekko van Ierland Kazimierz Gorka WageningeniCracow, June 1996 CONTENTS 1 On tbe Economics of Atmospberic Pollution Ekko van IerJand Wageningen Agricultural University, The Netherlands.