On the fair division of greenhouse gas abatement cost

This paper introduces a solution for the fair division of emission reduction costs in the climate change regime. Our primary focus is on the fair division of efficiency gains that arise from exchanging the initial allocation of emission entitlements, rather than the initial allocation itself. We pro...

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Bibliographic Details
Published inResource and energy economics Vol. 30; no. 2; pp. 260 - 276
Main Authors Böhringer, Christoph, Helm, Carsten
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.05.2008
Elsevier
Elsevier Sequoia S.A
SeriesResource and Energy Economics
Subjects
Applied sciences
Atmospheric pollution
CGE models
Climate change
Combustion and energy production
Economic models
Emissions control
Energy
Energy economics
Energy policy
Exact sciences and technology
Fair division
General, economic and professional studies
Greenhouse gases
Methodology. Modelling
Pollution
Pollution sources. Measurement results
Resource allocation
Studies
Welfare bounds
D63
Climate change
Welfare bounds
D58
Fair division
Q20
CGE models
Economic analysis
Emission permit
Environmental policy
Pollution control
Pollution prevention
Developing countries
Fair division; Climate change; Welfare bounds; CGE models
Walrasian equilibrium
Energy policy
Spatial variation
Pollutant emission
Cost breakdown
Allocation
Geographic distribution
Welfare
D58; D63; Q20
General equilibrium model
Industrialized country
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Summary:This paper introduces a solution for the fair division of emission reduction costs in the climate change regime. Our primary focus is on the fair division of efficiency gains that arise from exchanging the initial allocation of emission entitlements, rather than the initial allocation itself. We propose to complement the competitive Walrasian solution with welfare bounds, the ethical justification of which rests on commonality of ownership. Simulations with an intertemporal computable general equilibrium model illustrate the relevance of such welfare bounds. For a wide range of initial allocations of emission entitlements – including an equal per capita allocation – we find that developing countries should be fully compensated for their emission abatement efforts, but should not receive any further transfers.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0928-7655
1873-0221
DOI:10.1016/j.reseneeco.2007.08.004