Document Type

Journal Article

Publication Date

2025

Keywords

Carbon capture and storage, infrastructure innovation, transboundary pollution, differential game analysis, cooperative equilibrium.

DOI

10.3934/jimo.2025055

Abstract

This study employs a differential game approach to examine the

carbon capture and storage (CCS) and infrastructure innovation strategies of

two countries in the context of transboundary pollution. The game model

incorporates three key elements: (i) the quantity of CO2 captured by each

country depends on its capital stock of CCS infrastructure; (ii) both countries

engage in infrastructure innovation activities; and (iii) an incentive equilibrium mechanism is developed to foster sustained cooperation between the two

countries. Our findings reveal that when emission levels remain constant, the

system exhibits a steady-state equilibrium with a saddle point in both non[1]cooperative and cooperative game scenarios. However, when emission levels

grow at a constant rate, a balanced growth path emerges, wherein both infrastructure investment and infrastructure capital stock experience the same

growth rate. To ensure the sustainability of cooperative outcomes, we introduce an incentive equilibrium that necessitates the achievement of the maxi[1]mum utility function at the cooperative equilibrium. This research contributes

to the understanding of the interplay between CCS deployment, infrastructure innovation, and transboundary pollution. The findings provide valuable

insights into the benefits of collaborative investment in CCS infrastructure

among nations, enabling policymakers to formulate cooperative strategies and

agreements to reduce pollution and enhance CO2 capture. Moreover, the research highlights the advantages of cooperative investment, including reduced

pollution and increased CO2 capture, serving as a catalyst for countries to foster collaboration in addressing transboundary CO2 emissions and facilitating

more effective solutions.

Source Publication

Journal of Industrial and Management Optimization

Volume Number

21

Issue Number

6

First Page

4331

Last Page

4348

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