An algorithmic solution to the interval Kyoto game

The conference of Kyoto 1997 instutionalized a new and important economic instrument for environmental protection, the Joint Implementation Progran (JI). The concept of Joint Implementation involves a bilateral or multilateral deal in which countries facing high pollution abatment costs invest in abatment in countries with lower costs, and receive credit for the resulting reduction in greenhouse gas emmission. The Technology-Emissions-Means (TEM) model developped by Pickl (1999) aims at embedding the Joint Implementation process into an optimal energy management model that takes into account all relevant technical and financial constraints. Based on this model, we present a new bargaining approach for an efficient international bargaining procedure within the so-called interval Kyoto game.