Modelling and solution to the municipal effluent management problem

Abstract

The aim of this paper is to analyse the municipal effluent management problem; we also show how to solve a problem of that kind. Municipal effluent economics is a complex problem. There are many agents con-fined to a small area, their capital can change through the investment and dis-investment processes and they can abate pollution in the abatement facilities or '(in-stantaneously" (e.g. by exporting it). The agents pollute a local river. On the other hand, a regional authority would like to preserve the quality of the river's water. The quality can be expressed as a series of constraints to be satisfied locally, globally or on average, in the spatial and temporal sense. For that complicated situation, we propose a multi-criteria hierarchical multilevel optimisation model with a Stackelberg type equilibrium between the leader's and the followers' levels, and a Nash type equi-librium at the followers' level. We outline the procedure necessary for a solution to a problem of that class. We analytically compute a steady state Nash equilibrium solution for the followers, and determine a Stackelberg equilibrium solution for the leader-followers interactions, through a Decision Support Tool.