The effect of watershed environmental management is closely related to the cooperation modes of upstream and downstream regions pollution control, but the existing literature rarely considers it. Additionally, based on the cumulative and cross-border impacts of pollution discharge in different regions, it is appropriate to use dynamic game theory to study pollution control problems. Therefore, this paper develops a dynamic multi game model to analyze the pollution control game behavior between the upstream and downstream regions along the basin in three scenarios: non-cooperation, pollution abatement cooperation, and ecological compensation. By using the optimal control method, we get the dynamic equilibrium strategies of the government and enterprises and pollution stock trajectories under different cooperation modes. The results show that pollution abatement cooperation can improve the environment, but may not improve social welfare; the eco-compensation mechanism is not always conducive to the improvement of the environment and welfare of the basin, and the effective conditions of implementing ecological compensation is put forward. In addition, we also analyzed the impact of consumer preferences, pollution treatment efficiency, and other parameters on governments and enterprises decision-making and the social welfare. These conclusions provide a theoretical basis for cooperative governance scheme for transboundary pollution in river basin.
Keywords: Differential game; Ecological compensation; Emission tax; Pollution abatement; Transboundary pollution.
© 2023. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.