Modeling and Computation of Transboundary Industrial Pollution with Emission Permits Trading by Stochastic Differential Game

@inproceedings{Chang2015ModelingAC,
  title={Modeling and Computation of Transboundary Industrial Pollution with Emission Permits Trading by Stochastic Differential Game},
  author={Shuhua Chang and Xinyu Wang and Zheng Wang and Zhen Wang},
  booktitle={PloS one},
  year={2015}
}
Transboundary industrial pollution requires international actions to control its formation and effects. In this paper, we present a stochastic differential game to model the transboundary industrial pollution problems with emission permits trading. More generally, the process of emission permits price is assumed to be stochastic and to follow a geometric Brownian motion (GBM). We make use of stochastic optimal control theory to derive the system of Hamilton-Jacobi-Bellman (HJB) equations… CONTINUE READING