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Moral concerns on tradable pollution permits in international environmental agreements

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  • Eyckmans, Johan
  • Kverndokk, Snorre

Abstract

We 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 because of 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.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:ecolec:v:69:y:2010:i:9:p:1814-1823
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    Cited by:

    1. Anderson, Blake & M'Gonigle, Michael, 2012. "Does ecological economics have a future?," Ecological Economics, Elsevier, vol. 84(C), pages 37-48.
    2. Karen Pittel & Dirk Rübbelke, 2013. "International Climate Finance and Its Influence on Fairness and Policy," The World Economy, Wiley Blackwell, vol. 36(4), pages 419-436, April.
    3. Rübbelke, Dirk T.G., 2011. "International support of climate change policies in developing countries: Strategic, moral and fairness aspects," Ecological Economics, Elsevier, vol. 70(8), pages 1470-1480, June.
    4. Snorre Kverndokk, 2013. "Moral positions on tradable permit markets," Chapters,in: Handbook on Energy and Climate Change, chapter 22, pages 490-499 Edward Elgar Publishing.
    5. repec:eee:pubeco:v:155:y:2017:i:c:p:138-146 is not listed on IDEAS
    6. Birgit Bednar-Friedl, 2012. "Climate policy targets in emerging and industrialized economies: the influence of technological differences, environmental preferences and propensity to save," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(2), pages 191-215, May.
    7. Jakob, Michael & Kübler, Dorothea & Steckel, Jan Christoph & van Velduizen, Roel, 2016. "Clean up your own mess: An experimental study of moral responsibility and efficiency," Discussion Papers, Research Unit: Market Behavior SP II 2016-215, Social Science Research Center Berlin (WZB).
    8. Hong, Fuhai, 2015. "International Environmental Agreements with reference points," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 59(C), pages 68-73.
    9. Eyckmans, Johan & Hagem, Cathrine, 2011. "The European Union's potential for strategic emissions trading through permit sales contracts," Resource and Energy Economics, Elsevier, vol. 33(1), pages 247-267, January.
    10. Braaten, Ragnhild Haugli & Brekke, Kjell Arne & Rogeberg, Ole, 2015. "Buying the right to do wrong – An experimental test of moral objections to trading emission permits," Resource and Energy Economics, Elsevier, vol. 42(C), pages 110-124.
    11. Simon Quemin & Christian de Perthuis, 2017. "Transitional restricted linkage between Emissions Trading Schemes," Working Papers 1701, Chaire Economie du climat.
    12. Wu, Pei-Ing & Chen, Chai Tzu & Cheng, Pei-Ching & Liou, Je-Liang, 2014. "Climate game analyses for CO2 emission trading among various world organizations," Economic Modelling, Elsevier, vol. 36(C), pages 441-446.
    13. Fuhai Hong & Susheng Wang, 2012. "Climate Policy, Learning, and Technology Adoption in Small Countries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(3), pages 391-411, March.

    More about this item

    Keywords

    Tradable emission permits International environmental agreements Non-cooperative game theory Moral motivation Identity;

    JEL classification:

    • 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 and their Management; Global Warming

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