Fitted Finite Volume Method of Three Transboundary Pollution in Three Gorges Reservoir Area of Chongqing City with Emission Permits Trading by Cooperative Stochastic Differential Game

Fitted Finite Volume Method of Three Transboundary Pollution in Three Gorges Reservoir Area of Chongqing City with Emission Permits Trading by Cooperative Stochastic Differential Game

Year:    2018

Author:    Zuliang Lu, Shuhua Zhang, Lin Li, Longzhou Cao, Yin Yang

Advances in Applied Mathematics and Mechanics, Vol. 10 (2018), Iss. 3 : pp. 690–709

Abstract

In this paper, we present a stochastic differential game to model the three transboundary industrial pollution problems in Three Gorges Reservoir Area of Chongqing City with emission permits trading. The process of emission permits price is assumed to be stochastic and to follow a geometric Brownian motion. We make use of stochastic optimal control theory to derive the system of Hamilton-Jacobi-Bellman equations satisfied by the value functions for the cooperative games, and then propose a fitted finite volume method to solve it. The efficiency and the usefulness of this method are illustrated by an empirical study for Wanzhou District, Kaizhou District, and Yunyang County in  Chongqing City.

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Journal Article Details

Publisher Name:    Global Science Press

Language:    English

DOI:    https://doi.org/10.4208/aamm.OA-2017-0082

Advances in Applied Mathematics and Mechanics, Vol. 10 (2018), Iss. 3 : pp. 690–709

Published online:    2018-01

AMS Subject Headings:    Global Science Press

Copyright:    COPYRIGHT: © Global Science Press

Pages:    20

Keywords:    Three transboundary pollution in Three Gorges Reservoir Area of Chongqing City stochastic differential game emission permits trading Hamilton-Jacobi-Bellman equation fitted finite volume method.

Author Details

Zuliang Lu

Shuhua Zhang

Lin Li

Longzhou Cao

Yin Yang

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