Three essays on acid rain control games between China and Japan

This dissertation contains three essays on the non-cooperative acid rain control games between China and Japan, featured with uni-directional transboundary pollution, voluntary international assistance, and a narrowed-down Japanese-Chinese income gap. The first essay studies a Cournot-Nash acid rain control game between these two countries, as well as the inefficiency of its outcome. We use comparative statics to explore the possible effects of the narrowed-down income gap between these two countries on the policymaking, environment quality, and social welfare, and our results suggest that it actually plays a positive role in almost every aspect. Both countries benefit from expanded consumption, improved environmental quality, and increased welfare levels. In the second essay, we assume that Japan's voluntary financial assistance on China's environmental projects could be out of both selfish and altruistic motivations. We then present a more general model, derive equilibrium conditions, and explore the comparative static properties of the conventional non-altruistic model and our altruistic model. We make comparison between these two sets of results and highlight the different effects brought by the existence of this positive altruism parameter. We also study the effects of an exogenous change in the altruism parameter. In the third essay, we study Japan's voluntary technological assistance to selected Chinese energy firms for upgrading their abatement production technology. Chinese government holds private information on their own damage intensity coefficient, and their announcement regarding the type does not have to be truthful revelation. China should commit to their announcement however, in the sense that in case they decide to lie about their true type at the first stage, they ought to make sure to keep Japan uninformed in that neither their quantity choice nor the permit price reveals the truth at the third stage. We explore conditions to support truth-telling by Chinese government in both separate domestic permit markets case and regional permit market case, and compare the differences between the two situations. Our results suggest that the introduction of regional permit market does not necessarily help on this purpose.