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Constraining equitable allocations of tradable greenhouse gases emission quotas by acceptability

  • GERMAIN, Marc
  • VAN STEENBERGHE, Vincent

Allocations of tradable greenhouse gases (GHG) emission quotas among countries may take place according to several sharing rules corresponding to a certain perception of equity. For instance, allocating quotas in direct proportion to population, in inverse relation to GDP or according to past emissions has been advocated. Taking a long term perspective, we compute such allocations of tradable quotas with a dynamic model developped on the basis of the RICE model (Norhaus and Yang, 1996). The total amount of quotas to be distributed in each period corresponds to the total optimal amount of emissions to be realised at each period. We observe that the "equitable" quotas allocation rules the most often referred to are not acceptable by every country at every period: some of them would be better off by not co-operating. We then propose a mechanism which determines allocations of GHG emission quotas that satisfy as much as possible each "equitable" allocation rule while keeping acceptability for each country.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2001005.

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Date of creation: 00 Jan 2001
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Handle: RePEc:cor:louvco:2001005
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  1. Chander, P. & Tulkens, H., . "A core-theoretic solution for the design of cooperative agreements on transfrontier pollution," CORE Discussion Papers RP -1158, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. GERMAIN, Marc & VAN YPERSELE, Jean-Pascal, 1999. "Financial transfers to sustain international cooperation in the climate change framework," CORE Discussion Papers 1999036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Carraro, Carlo & Siniscalco, Domenico, 1991. "Strategies for the International Protection of the Environment," CEPR Discussion Papers 568, C.E.P.R. Discussion Papers.
  4. Larsen, Bjorn & Shah, Anwar, 1994. "Global tradable carbon permits, participation incentives, and transfers," Policy Research Working Paper Series 1315, The World Bank.
  5. Johan Eyckmans & Henry Tulkens, 1999. "Simulating with RICE Coalitionally Stable Burden Sharing Agreements for the Climate Change Problem," CESifo Working Paper Series 228, CESifo Group Munich.
  6. 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.
  7. EYCKMANS, Johan & TULKENS, Henry, 1999. "Simulating coalitionally stable burden sharing agreements for the climate change problem," CORE Discussion Papers 1999026, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Rose, Adam & Stevens, Brandt, 1993. "The efficiency and equity of marketable permits for CO2 emissions," Resource and Energy Economics, Elsevier, vol. 15(1), pages 117-146, March.
  9. GERMAIN, Marc & TOINT, Philippe & TULKENS, Henry & DE ZEEUW, Aart, 1998. "Transfers to sustain core-theoretic cooperation in international stock pollutant control," CORE Discussion Papers 1998032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  10. Peter Bohm & Bjorn Larsen, 1994. "Fairness in a tradeable-permit treaty for carbon emissions reductions in Europe and the former Soviet Union," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 4(3), pages 219-239, June.
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