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Strategy Proof Uniform Effort Sharing Schemes For Transfrontier Pollution Problems

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Author Info
Johan Eyckmans ()

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Abstract

Uniform effort sharing rules for transfrontier pollution problems, like the popular equal percentage reduction arrangement, do not result in a cost efficient allocation of emission abatement efforts. In addition, they may violate voluntary participation constraints if the uniform effort level is decided upon by means of ordinary majority vote. In contrast to ordinary majority vote, I consider in this paper the so-called conservative mechanism by Moulin (1994) which picks the smallest revealed effort level in stead of the median. The conservative mechanism always respects a weak participation constraint. Moreover, it is coalitionally strategy proof meaning that no individual player, or group of players, can achieve a better outcome by misrepresenting its preferences for environmental quality. In order to remedy the cost inefficiency of the equal percentage arrangements, I propose to apply the conservative mechanism to the choice of a uniform emission tax rate. Simulations for the greenhouse effect indicate that the latter mechanism does considerably better than the traditional equal percentage arrangement. Copyright Kluwer Academic Publishers 1999

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File URL: http://hdl.handle.net/10.1023/A:1008339224595
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Publisher Info
Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 14 (1999)
Issue (Month): 2 (September)
Pages: 165-189
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Handle: RePEc:kap:enreec:v:14:y:1999:i:2:p:165-189

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Web page: http://www.springerlink.com/link.asp?id=100263

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Related research
Keywords: mechanism design; strategy proofness; transfrontier pollution problems;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Nordhaus, William D, 1991. "To Slow or Not to Slow: The Economics of the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 920-37, July. [Downloadable!] (restricted)
  2. Gibbard, Allan, 1973. "Manipulation of Voting Schemes: A General Result," Econometrica, Econometric Society, vol. 41(4), pages 587-601, July. [Downloadable!] (restricted)
  3. Henry Tulkens & Parkash Chander, 1997. "The Core of an Economy with Multilateral Environmental Externalities," International Journal of Game Theory, Springer, vol. 26(3), pages 379-401.
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  4. Jean-Marc Burniaux & John P. Martin & Giuseppe Nicoletti & Joaquim Oliveira Martins, 1992. "The Costs of Reducing CO2 Emissions: A Technical Manual," OECD Economics Department Working Papers 115, OECD, Economics Department. [Downloadable!]
  5. Satterthwaite, Mark Allen, 1975. "Strategy-proofness and Arrow's conditions: Existence and correspondence theorems for voting procedures and social welfare functions," Journal of Economic Theory, Elsevier, vol. 10(2), pages 187-217, April. [Downloadable!] (restricted)
  6. Laffont, J. J. & Moulin, H., 1982. "Introduction," Journal of Mathematical Economics, Elsevier, vol. 10(1), pages 1-3, June. [Downloadable!] (restricted)
  7. Moulin, Herve, 1994. "Serial Cost-Sharing of Excludable Public Goods," Review of Economic Studies, Blackwell Publishing, vol. 61(2), pages 305-25, April. [Downloadable!] (restricted)
  8. Michael Hoel, 1992. "International environment conventions: The case of uniform reductions of emissions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 2(2), pages 141-159, March. [Downloadable!] (restricted)
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  1. Johan Eyckmans & Michael Finus, 2003. "New Roads to International Environmental Agreements: The Case of Global Warming," Energy, Transport and Environment Working Papers Series ete0318, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment. [Downloadable!]
    Other versions:
  2. Anriquez, Gustavo, 2002. "Trade And The Environment: An Economic Literature Survey," Working Papers 28598, University of Maryland, Department of Agricultural and Resource Economics. [Downloadable!]
  3. Hans-Peter Weikard & Rob Dellink, 2008. "Sticks and Carrots for the Design of International Climate Agreements with Renegotiations," Working Papers 2008.26, Fondazione Eni Enrico Mattei. [Downloadable!]
  4. Urs Brandt, 2003. "Are Uniform Solutions Focal? – The Case of International Environmental Agreements," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 25(3), pages 357-376, July. [Downloadable!] (restricted)
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