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Economic Theory for the Environment

Economic Theory for the Environment

Essays in Honour of Karl-Göran Mäler

New Horizons in Environmental Economics series

Edited by Bengt Kriström, Partha Dasgupta and Karl-Gustaf Löfgren

Karl-Göran Mäler’s work has been a mainstay of the frontiers of environmental economics for more than three decades. This outstanding book, in his honour, assembles some of the best minds in the economics profession to confront and resolve many of the problems affecting the husbandry of our national environments.

Chapter 19: Highlighting the Acid Rain Game

Aart de Zeeuw

Subjects: economics and finance, environmental economics, environment, environmental economics


Aart de Zeeuw 1 INTRODUCTION It was to be expected that Karl-Göran Mäler would start up the research on the acid rain game. As a Swedish professor, he would be aware of Scandinavia’s difficult situation. On the one hand, the northern countries still have one of the largest forest densities in Europe but the forests were dying and knowledge was developing that this may be caused by the deposition and by the ambient concentration of sulphur dioxide and nitrogen oxides. On the other hand, Scandinavia could do little about the problem by itself since most of the emissions were generated outside this area. In particular, Scandinavia’s downwind position with respect to the United Kingdom and its polluting industry has been very problematic. Mäler’s strong motivation for environmental problems is one reason why he was attracted to the acid rain game. In ‘The acid rain game II’ (1993) he writes that ‘it is imperative that we can find solutions to the problems of international cooperation in the environmental field in order to secure continued welfare for the European people’ (p. 1; italics added). He was also already far beyond the limited view that this is an environmental problem and not an economic problem. The ‘substantial reduction in timber supply . . . will affect not only nature conservationists but also everyday man because of the economic consequences in a conventional sense’ (p. 1). The other reason why Mäler was attracted to the acid rain game was the intellectual challenge. In...

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