Research of Leader-Follower Problem to Tradable Emission Permits

Although tradable emission permits is a technique that controls environment pollution by means of market prompting, it isn\´t merely individual action that the sewage enterprises do under freedom market. In the total process of bringing tradable emission permits into effect, the function of government is still important. The environment department what is affiliated with government constitutes lots of macro-policies just as environment quality standard, the distribution and tradition regulations of emission permits; represents the nation\´s interest. And every sewage enterprise is microcosmic system which represents its own interest. In fact, the process of tradable emission permits is a process of "game", and "people" in the "game" are government and sewage enterprises. This paper aiming at the relation between upper-level decision-maker: environment department representing the nation interest and lower- level decision-maker: sewage enterprise representing its own interest, discusses and investigates it, and constitutes the principle and leader-follower integer linear bilevel programming model of tradable emission permits.