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Contracting for Environmental Property Rights: The Case of Vittel

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  • CHRISTOPHE DEPRES
  • GILLES GROLLEAU
  • NAOUFEL MZOUGHI

Abstract

Based on a real case of contracting for environmental property rights, we explore several implications of Coase's insights. The case study adds empirical content to basic transaction costs concepts by analysing the design and implementation of a contractual arrangement between a pollutee—a bottler of mineral water—and several polluting farmers. We analyse the bargaining between the two parties to determine how transaction cost issues (valuation disputes, bilateral monopoly conditions and third‐party effects) were overcome and how they succeeded in contracting for environmental property rights. We compare the Vittel case with other similar cases to draw lessons for environmental rights negotiations.

Suggested Citation

  • Christophe Depres & Gilles Grolleau & Naoufel Mzoughi, 2008. "Contracting for Environmental Property Rights: The Case of Vittel," Economica, London School of Economics and Political Science, vol. 75(299), pages 412-434, August.
    • Handle: RePEc:bla:econom:v:75:y:2008:i:299:p:412-434
    DOI: 10.1111/j.1468-0335.2007.00620.x
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    3. Tatyana Deryugina & Frances C. Moore & Richard S.J. Tol, 2020. "Applications of the Coase Theorem," Working Paper Series 0820, Department of Economics, University of Sussex Business School.
    4. Bingham, Logan Robert, 2021. "Vittel as a model case in PES discourse: Review and critical perspective," Ecosystem Services, Elsevier, vol. 48(C).
    5. Alain‐Désiré Nimubona & Jean‐Christophe Pereau, 2022. "Negotiating over payments for wetland ecosystem services," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(3), pages 1507-1538, August.
    6. Ornella Boutry, 2010. "A New Institutional Approach of Resource Use Conflicts: The Case of Poitou-Charentes," Post-Print hal-00655829, HAL.
    7. Philippe Coent, 2023. "Payment for environmental services related to aquifers: a review of specific issues and existing programmes," Review of Agricultural, Food and Environmental Studies, Springer, vol. 104(3), pages 273-310, December.
    8. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 811-846.
      • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
    9. Schleyer, Christian & Theesfeld, Insa & Hagedorn, Konrad & Aznar, Olivier & Callois, Jean-Marc & Verburg, Rene & Yelkouni, Martin & Olsson, Johanna Alkan, 2007. "Approach towards an operational tool to apply institutional analysis for the assessment of policy feasibility within SEAMLESS-IF," Reports 9295, Wageningen University, SEAMLESS: System for Environmental and Agricultural Modelling; Linking European Science and Society.
    10. Zhang, Daowei, 2016. "Payments for forest-based environmental services: A close look," Forest Policy and Economics, Elsevier, vol. 72(C), pages 78-84.
    11. François Facchini, 2008. "Droit de propriété et gestion des conflits agriculture - environnement," Post-Print hal-00732380, HAL.
    12. Steven G. Medema, 2020. "The Coase Theorem at Sixty," Journal of Economic Literature, American Economic Association, vol. 58(4), pages 1045-1128, December.
    13. Joël Houdet & Michel Trommetter & Jacques Weber, 2009. "Changing business perceptions regarding biodiversity: from impact mitigation towards new strategies and practices," Working Papers hal-00412875, HAL.
    14. Marjan van den Belt & Daniella Blake, 2015. "Investing in Natural Capital and Getting Returns: An Ecosystem Service Approach," Business Strategy and the Environment, Wiley Blackwell, vol. 24(7), pages 667-677, November.
    15. Di Corato, Luca & Dosi, Cesare & Moretto, Michele, 2018. "Multidimensional auctions for long-term procurement contracts with early-exit options: The case of conservation contracts," European Journal of Operational Research, Elsevier, vol. 267(1), pages 368-380.
    16. Douadia Bougherara & Gilles Grolleau & Naoufel Mzoughi, 2009. "The ‘make or buy’ decision in private environmental transactions," European Journal of Law and Economics, Springer, vol. 27(1), pages 79-99, February.
    17. Matsushima, Noriaki & Shinohara, Ryusuke, 2019. "Pre-negotiation commitment and internalization in public good provision through bilateral negotiations," Journal of Public Economics, Elsevier, vol. 175(C), pages 84-93.
    18. Houdet, Joël & Trommetter, Michel & Weber, Jacques, 2012. "Understanding changes in business strategies regarding biodiversity and ecosystem services," Ecological Economics, Elsevier, vol. 73(C), pages 37-46.
    19. Grolleau, Gilles & McCann, Laura M.J., 2012. "Designing watershed programs to pay farmers for water quality services: Case studies of Munich and New York City," Ecological Economics, Elsevier, vol. 76(C), pages 87-94.

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    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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