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Intergenerational transfers of pollution rights and growth

Author

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  • BRECHET, Thierry
  • LAMBRECHT, Stéphane
  • PRIEUR, Fabien

Abstract

We develop an overlapping generations growth model in which the individuals care about the environment. Many environmental policies suffer from institutional failures. We focus on the failure resulting from the delegation by the government of the exercise of the environmental policy to an administrative department. Though motivated by the department's expertise, the delegation principle may give rise to a conflict with social welfare maximization. This paper proposes an original policy mechanism of transfers of pollution rights capable of circumventing these failures and decentralizing optimal growth atcompetitive equilibrium.

Suggested Citation

  • BRECHET, Thierry & LAMBRECHT, Stéphane & PRIEUR, Fabien, 2005. "Intergenerational transfers of pollution rights and growth," LIDAM Discussion Papers CORE 2005042, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2005042
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    References listed on IDEAS

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    3. John, A. & Pecchenino, R. & Schimmelpfennig, D. & Schreft, S., 1995. "Short-lived agents and the long-lived environment," Journal of Public Economics, Elsevier, vol. 58(1), pages 127-141, September.
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    6. Jouvet, Pierre-Andre & Michel, Philippe & Rotillon, Gilles, 2005. "Optimal growth with pollution: how to use pollution permits?," Journal of Economic Dynamics and Control, Elsevier, vol. 29(9), pages 1597-1609, September.
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    Cited by:

    1. LAMBRECHT, Stéphane, 2005. "Maintaining environmental quality for overlapping generations: Some reflections on the US sky trust initiative," LIDAM Discussion Papers CORE 2005074, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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    More about this item

    Keywords

    pollution; optimal growth; overlapping generations;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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