International  negotiations  on  acid  rains 
                in  Northern Europe: 
          a discrete time iterative process

    Marc Germain   Philippe L. Toint  Henri Tulkens

                    Report 95/7

This  paper proposes  a dynamic  model  of  international
negotiations on transboundary pollution.  The approach is
characterized by a discrete time formulation (at variance
with the continuous  model of Kaitala et al.  (1995)) and
by  a  suitable  reformulation  of the  local information
assumption on cost and damage functions: at each stage of
the negotiation,  the  parties assign the  best  possible
cooperative state, given the available information, as an
objective  for the next  stage.  It  is  shown  that  the
resulting  sequence  of  states  converges  to  a  Pareto
optimum in  a  finite  number  of stages.  Furthermore, a
financial  transfers  structure   is   formulated,  which
guarantees  that  the  desired  sequence   of  states  is
rational for the involved parties,  at  the individual as
well as at the coalition level.  The concepts are applied
in  a  numerical  simulation  of  the  SO2  transboundary
pollution  problem  relating  to  acid rains  in Northern
Europe.

Note: 
The  postcript  file  TR95-07.ps  does  not  contain  the
figures.  If you  wish to obtain a complete paper copy of
this     report,     please     contact      Ph     Toint
(pht@math.fundp.ac.be)