Regulation via the Polluter-Pays Principle
AbstractWe consider the problem of regulating an economy with environmental pollution. We examine the distributional impact of the polluter-pays principle which requires that any agent compensates all other agents for the damages caused by his or her (pollution) emissions. With constant marginal damages we show that regulation via the polluter-pays principle leads to the unique welfare distribution that assigns non-negative individual welfare and renders each agent responsible for his or her pollution impact. We extend both the polluter-pays principle and this result to increasing marginal damages due to pollution. We also discuss the acceptability of the polluter-pays principle and compare it with the Vickrey-Clark-Groves mechanism.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by LERNA, University of Toulouse in its series LERNA Working Papers with number 10.18.324.
Date of creation: Dec 2010
Date of revision:
Other versions of this item:
- AMBEC, Stefan & EHLERS, Lars, 2011. "Regulation via the Polluter-Pays Principle," Cahiers de recherche 2011-01, Universite de Montreal, Departement de sciences economiques.
- AMBEC, Stefan & EHLERS, Lars, 2011. "Regulation via the Polluter-Pays Principle," Cahiers de recherche 01-2011, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- D30 - Microeconomics - - Distribution - - - General
- D6 - Microeconomics - - Welfare Economics
This paper has been announced in the following NEP Reports:
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.:
- Chander, P. & Tulkens, H., .
"The core of an economy with multilateral environmental externalities,"
CORE Discussion Papers RP
-1276, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- 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.
- Chander, Parkash & Tulkens, Henry, 1994. "The Core of an Economy With Multilateral Environmental Externalities," Working Papers 886, California Institute of Technology, Division of the Humanities and Social Sciences.
- CHANDER, Parkash & TULKENS, Henry, 1995. "The Core of an Economy with Multilateral Environmental Externalities," CORE Discussion Papers 1995050, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Fleurbaey, Marc, 2012.
"Fairness, Responsibility, and Welfare,"
Oxford University Press, number 9780199653591.
- Moulin, Herve, 1990.
"Uniform externalities : Two axioms for fair allocation,"
Journal of Public Economics,
Elsevier, vol. 43(3), pages 305-326, December.
- Moulin, H., 1989. "Uniform Externalities: Two Axioms For Fair Allocation," UFAE and IAE Working Papers 117-89, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Finus, Michael & Tjotta, Sigve, 2003. "The Oslo Protocol on sulfur reduction: the great leap forward?," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2031-2048, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maxime MARTY).
If references are entirely missing, you can add them using this form.