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Sharing the cost of cleaning up non-point source pollution

Author

Listed:
  • Sylvain Béal

    (CRESE - Centre de REcherches sur les Stratégies Economiques (UR 3190) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE])

  • David Lowing

    (CentraleSupélec, LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay)

  • Léa Munich

    (CRESE - Centre de REcherches sur les Stratégies Economiques (UR 3190) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE], BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

We consider the problem of sharing the cost of cleaning the non-point source pollution of industrial sites among the firms that own these sites. The bilateral liabilities between firms are depicted by an undirected graph. We introduce and characterize axiomatically two allocation rules inspired by the celebrated Polluter pays and Beneficiary pays principles in environmental law. The first one shares evenly the cost of cleaning up a site among the firms that can have caused the corresponding environmental damage. The second one charges to each firm the entire cost of cleaning up its own production site. We also establish connections with cooperative game theory.

Suggested Citation

  • Sylvain Béal & David Lowing & Léa Munich, 2024. "Sharing the cost of cleaning up non-point source pollution," Working Papers hal-04634728, HAL.
    • Handle: RePEc:hal:wpaper:hal-04634728
    Note: View the original document on HAL open archive server: https://univ-fcomte.hal.science/hal-04634728v1
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    File URL: https://univ-fcomte.hal.science/hal-04634728v1/document
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    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games

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