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Shiftable Externalities: A Market Solution

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  • Lars Hansen

Abstract

In this paper we propose a regulatory scheme for what has become known as ‘shiftable’ externalities (‘Not In My Backyard’ type garbage location problemswhere the externality is characterized by the absence of jointness in supply).The scheme facilitates the establishment of a market for the externality, and it isfeasible for a wider class of regulation problems and more information efficientthan the other regulatory schemes that have been proposed for this type ofexternality. Finally, we show that it is possible to decentralize the participationdecision so as to take account of verification costs. Copyright Kluwer Academic Publishers 2002

Suggested Citation

  • Lars Hansen, 2002. "Shiftable Externalities: A Market Solution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(3), pages 221-239, March.
    • Handle: RePEc:kap:enreec:v:21:y:2002:i:3:p:221-239
    DOI: 10.1023/A:1014544516120
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    References listed on IDEAS

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    1. Freeman, A. III, 1984. "Depletable externalities and pigouvian taxation," Journal of Environmental Economics and Management, Elsevier, vol. 11(2), pages 173-179, June.
    2. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249.
    3. Geaun Jerome C., 1993. "On the Shiftable Externalities," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 30-44, July.
    4. Shaw, Daigee & Shaw, Rong-Dean, 1991. "The resistibility and shiftability of depletable externalities," Journal of Environmental Economics and Management, Elsevier, vol. 20(3), pages 224-233, May.
    5. Bird, Peter J. W. N., 1987. "The transferability and depletability of externalities," Journal of Environmental Economics and Management, Elsevier, vol. 14(1), pages 54-57, March.
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