A MFG approach for competing firms in the Emission Trading System
In this talk we consider the problem of reducing the carbon emissions of a set of firms over a finite time horizon. Firms can trade allowances in a way that minimizes the total expected costs from abatement and trading plus a terminal quadratic penalty, and they can also choose which type of energy to use (fossil or green) to produce their goods and thus maximize profits from production. Using mean-field game theory as a mathematical tool, we aim to understand how different types of market competition can influence the energy transition. This is a joint work with Giulia Livieri (LSE) and Gianmarco Del Sarto (SNS).
Area: CS23 - Stochastic processes and their applications (Katia Colaneri)
Keywords: environmental economics;ETS;Mean Field Games
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