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Constraining equitable allocations of tradable greenhouse gases emission quotas by acceptability

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  • GERMAIN, Marc
  • VAN STEENBERGHE, Vincent

Abstract

Allocations of tradable greenhouse gases (GHG) emission quotas among countries may take place according to several sharing rules corresponding to a certain perception of equity. For instance, allocating quotas in direct proportion to population, in inverse relation to GDP or according to past emissions has been advocated. Taking a long term perspective, we compute such allocations of tradable quotas with a dynamic model developped on the basis of the RICE model (Norhaus and Yang, 1996). The total amount of quotas to be distributed in each period corresponds to the total optimal amount of emissions to be realised at each period. We observe that the "equitable" quotas allocation rules the most often referred to are not acceptable by every country at every period: some of them would be better off by not co-operating. We then propose a mechanism which determines allocations of GHG emission quotas that satisfy as much as possible each "equitable" allocation rule while keeping acceptability for each country.

Suggested Citation

  • GERMAIN, Marc & VAN STEENBERGHE, Vincent, 2001. "Constraining equitable allocations of tradable greenhouse gases emission quotas by acceptability," LIDAM Discussion Papers CORE 2001005, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2001005
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    Cited by:

    1. Michael Finus & Ekko Ierland & Rob Dellink, 2006. "Stability of Climate Coalitions in a Cartel Formation Game," Economics of Governance, Springer, vol. 7(3), pages 271-291, August.
    2. Juan-Carlos Altamirano-Cabrera & Michael Finus, 2006. "Permit trading and stability of international climate agreements," Journal of Applied Economics, Universidad del CEMA, vol. 9, pages 19-48, May.
    3. Miyuki Nagashima & Rob Dellink, 2008. "Technology spillovers and stability of international climate coalitions," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 8(4), pages 343-365, December.
    4. VAN STEENBERGHE, Vincent, 2004. "Core-stable and equitable allocations of greenhouse gas emission permits," LIDAM Discussion Papers CORE 2004075, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Kotaro Kawamata & Masahide Horita, 2014. "Applying Matching Strategies in Climate Change Negotiations," Group Decision and Negotiation, Springer, vol. 23(3), pages 401-419, May.
    6. Pedro, de Mendonça, 2009. "Self-Enforcing Climate Change Treaties: A Generalized Differential Game Approach with Applications," MPRA Paper 17889, University Library of Munich, Germany.
    7. Frank Jotzo & John C. V. Pezzey, 2005. "Optimal intensity targets for emissions trading under uncertainty (now replaced by EEN0605)," Economics and Environment Network Working Papers 0504, Australian National University, Economics and Environment Network.
    8. Michael Finus & Juan-Carlos Altamirano-Cabrera & Ekko Ierland, 2005. "The effect of membership rules and voting schemes on the success of international climate agreements," Public Choice, Springer, vol. 125(1), pages 95-127, July.

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    More about this item

    Keywords

    environmental economics; climate change; dynamic games; tradable permits; equitable allocations;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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