Moral concerns on tradable pollution permits in international environmental agreements
AbstractWe investigate how moral concerns about permit trading affect an endogenous pollution permit trading equilibrium, where governments choose non-cooperatively the amount of permits they allocate to domestic industries. Politicians may feel reluctant to allow permit trading and/or may prefer that abatement is undertaken domestically due to moral concerns. This will have an effect on the initial permit allocations, and, therefore, on global emissions. The impact on global emissions depends on the precise formulation of the moral concerns, but under reasonable assumptions, we show that global emissions may increase. Thus, doing what is perceived as good does not always yield the desired outcome. However, this can be offset by restrictions on permit trading when governments have moral concerns about this trade.
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Bibliographic InfoPaper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën in its series Center for Economic Studies - Discussion papers with number ces09.12.
Date of creation: Jun 2009
Date of revision:
Tradable emission permits; international environmental agreements; non-cooperative game theory; moral motivation; identity.;
Other versions of this item:
- Eyckmans, Johan & Kverndokk, Snorre, 2010. "Moral concerns on tradable pollution permits in international environmental agreements," Ecological Economics, Elsevier, vol. 69(9), pages 1814-1823, July.
- Eyckmans, Johan & Kverndokk, Snorre, 2009. "Moral Concerns on Tradable Pollution Permits in International Environmental Agreements," Memorandum 13/2009, Oslo University, Department of Economics.
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-14 (All new papers)
- NEP-ENE-2009-11-14 (Energy Economics)
- NEP-ENV-2009-11-14 (Environmental Economics)
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