Fair division theory and climate change policy

This paper analyzes the fair division of common property resources when monetary compensations are feasible. A prominent example is the fair division of the atmosphere's limited absorptive capacity for greenhouse gases. I propose a solution that is Pareto efficient and satisfies the axiomatic f...

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Bibliographic Details
Published inEnvironment and development economics Vol. 13; no. 4; pp. 441 - 455
Main Author HELM, CARSTEN
Format Journal Article
LanguageEnglish
Published Cambridge, UK Cambridge University Press 01.08.2008
Cambridage University Press
Subjects
Carbon dioxide emissions
Climate change
Climate change policy
Compensation
Costs
Developing countries
Economic models
Efficiency
Emissions
Environmental economics
Environmental policy
Equity
Fairness
Greenhouse effect
Greenhouse gas emissions
Greenhouse gases
Joint ownership
LDCs
Pareto efficiency
Pareto optimum
Pollutant emissions
Rationality
Resource allocation
Resource ownership
Studies
THEORY AND APPLICATIONS
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Summary:This paper analyzes the fair division of common property resources when monetary compensations are feasible. A prominent example is the fair division of the atmosphere's limited absorptive capacity for greenhouse gases. I propose a solution that is Pareto efficient and satisfies the axiomatic fair division criteria of individual rationality, stand-alone upper bound, and a version of envy-freeness. The latter criterion is adapted to problems where monetary compensations can be used to facilitate the fair division of the common resource. Applied to climate change, the solution implies that developing countries should participate in emission reduction efforts, but should be fully compensated for their incremental abatement costs.
Bibliography:ark:/67375/6GQ-1CHVXBDQ-G
istex:4288D1D492CF7CF8CD670CC33C3ADAEF221BF737
ArticleID:00444
Part of this paper was written while I was visiting the Institute of Social and Economic Research (ISER) at Osaka University, Japan. I am grateful for the great hospitality which I received there. I would also like to thank Masaki Aoyagi, Bertrand Koebel, Anja Schöttner and three anonymous referees for valuable comments.
PII:S1355770X08004440
ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:1355-770X
1469-4395
DOI:10.1017/S1355770X08004440