OPTIMAL ACID-RAIN ABATEMENT POLICY FOR EUROPE - AN ANALYSIS FOR THE YEAR 2000

Acid rain causes greater environment damage than would occur if countr ies act cooperatively. Based on new estimates of sulphur abatement cos t functions, the potential gains from cooperation are calculated for E urope. Various cooperative abatement rates are compared with the rates implied by recent international agreements, the 30% club and the Seco nd Sulphur Protocol. It is shown that the monetary gains from cooperat ion may be smaller than previously thought. The distinction is made be tween primary and secondary abatement, and their respective roles ave discussed: it is shown that agreed targets can only be met if primary measures (eg fuel switching) are adopted.