Game Practice and the Environment

Game Practice and the Environment

The Fondazione Eni Enrico Mattei series on Economics, the Environment and Sustainable Development

Edited by Carlo Carraro and Vito Fragnelli

This book summarises the latest achievements of researchers involved in the application of game theory to the analysis of environmental matters. It provides an overview of different methods and applications, and gives the reader new insights on the solutions to complex environmental problems. The authors investigate various game theoretic approaches, including cooperative and non-cooperative game theory, and analyse both dynamic and static games. They illustrate the application of these approaches to global and local environmental problems, and present novel but effective tools to support environmental policy making. In particular, they focus on three important issues; climate negotiations and policy, the sharing of environmental costs, and environmental management and pollution control.

Chapter 6: A Model for Cooperative Inter-Municipal Waste Collection: Cost Evaluation Toward Fair Cost Allocation

Stefano Moretti

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


6. A model for cooperative intermunicipal waste collection: cost evaluation toward fair cost allocation1 Stefano Moretti 1. INTRODUCTION Some countries in the EU have a very large number of small municipalities with individual responsibility for managing municipal waste. These are frequently too small to be able to develop a waste management system (wms) that meets the high standards demanded by EU legislation at an affordable cost. In this case, as the Handbook on the Implementation of EC Environmental Legislation (European Commission, 2000) suggests, inter-municipal cooperation can be very beneficial in achieving groupings that are large enough to make the wms affordable. Indeed, due to economies of scale, imposed by the need for specialist staff and facilities (Tickner and McDavid, 1986; Antonioli et al., 2000), the size of inter-municipal areas tends to expand (European Commission, 2000). From this follows the usefulness of a tool capable of efficiently reorganizing the wms as the intermunicipal area where the service has to be supplied is in the process of enlargement. On the other hand, efficiency cannot be the sole criterion which has to be considered in order to make decisions on this topic. In fact the overall supply cost must still be met by single municipalities, which are not interested in paying more than the amount they would have paid if they had been organized in different groupings. Roughly speaking, the overall cost must be shared among municipalities in a fair way in order to foster cooperation among...

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