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A Voting Architecture for the Governance of Free-Driver Externalities, with Application to Geoengineering

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  • Martin Weitzman

Abstract

Climate change is a global "free rider" problem because significant abatement of greenhouse gases is an expensive public good requiring international cooperation to apportion compliance among states. But it is also a global "free driver" problem because geoengineering the stratosphere with reflective particles to block incoming solar radiation is so cheap that it could essentially be undertaken unilaterally by one state perceiving itself to be in peril. This paper develops the main features of a "free driver" externality in a simple model based on the asymmetric consequences of type-I and type-II errors. I propose a social-choice decision architecture based on the solution concept of a supermajority voting rule and derive its basic properties. In the model this supermajority voting rule attains the socially optimal cooperative solution, which is a new theoretical result around which the paper is built.

Suggested Citation

  • Martin Weitzman, 2012. "A Voting Architecture for the Governance of Free-Driver Externalities, with Application to Geoengineering," NBER Working Papers 18622, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18622
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    References listed on IDEAS

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    1. repec:cup:cbooks:9780511771576 is not listed on IDEAS
    2. Marlos Goes & Nancy Tuana & Klaus Keller, 2011. "The economics (or lack thereof) of aerosol geoengineering," Climatic Change, Springer, vol. 109(3), pages 719-744, December.
    3. Moreno-Cruz, Juan B., 2015. "Mitigation and the geoengineering threat," Resource and Energy Economics, Elsevier, vol. 41(C), pages 248-263.
    4. Moulin,Hervi, 1991. "Axioms of Cooperative Decision Making," Cambridge Books, Cambridge University Press, number 9780521424585, April.
    5. Easley,David & Kleinberg,Jon, 2010. "Networks, Crowds, and Markets," Cambridge Books, Cambridge University Press, number 9780521195331, April.
    6. Bergstrom, Ted C, 1979. " When Does Majority Rule Supply Public Goods Efficiently?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 81(2), pages 216-226.
    7. David C. Wyld, 2010. "ASecond Life for organizations?: managing in the new, virtual world," Management Research Review, Emerald Group Publishing, vol. 33(6), pages 529-562, May.
    8. David G. Victor, 2008. "On the regulation of geoengineering," Oxford Review of Economic Policy, Oxford University Press, vol. 24(2), pages 322-336, Summer.
    9. Scott Barrett, 2008. "The Incredible Economics of Geoengineering," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 39(1), pages 45-54, January.
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    Cited by:

    1. Richard S.J. Tol, 2016. "Distributional Implications of Geoengineering," Working Paper Series 8316, Department of Economics, University of Sussex.
    2. repec:eee:eecrev:v:94:y:2017:i:c:p:23-44 is not listed on IDEAS
    3. Nkuiya, Bruno, 2015. "Transboundary pollution game with potential shift in damages," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 1-14.
    4. Heyen, Daniel, 2015. "Strategic Conflicts on the Horizon: R&D Incentives for Environmental Technologies," Working Papers 0584, University of Heidelberg, Department of Economics.
    5. Richard S.J. Tol, 2016. "Distributional Implications of Geoengineering," Working Paper Series 08316, Department of Economics, University of Sussex.
    6. Costello, Christopher & Quérou, Nicolas & Tomini, Agnes, 2017. "Private eradication of mobile public bads," European Economic Review, Elsevier, vol. 94(C), pages 23-44.
    7. Heutel, Garth & Moreno-Cruz, Juan & Shayegh, Soheil, 2018. "Solar geoengineering, uncertainty, and the price of carbon," Journal of Environmental Economics and Management, Elsevier, vol. 87(C), pages 24-41.
    8. Daniel Heyen, 2016. "Strategic Conflicts On The Horizon: R&D Incentives For Environmental Technologies," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 7(04), pages 1-27, November.
    9. repec:eee:reecon:v:71:y:2017:i:2:p:212-224 is not listed on IDEAS
    10. Daniel Heyen & Thilo Wiertz & Peter Irvine, 2015. "Regional disparities in SRM impacts: the challenge of diverging preferences," Climatic Change, Springer, vol. 133(4), pages 557-563, December.
    11. Farrer, Benjamin & Holahan, Robert & Shvetsova, Olga, 2017. "Accounting for heterogeneous private risks in the provision of collective goods: Controversial compulsory contracting institutions in horizontal hydrofracturing," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 138-150.
    12. Moreno-Cruz, Juan B., 2015. "Mitigation and the geoengineering threat," Resource and Energy Economics, Elsevier, vol. 41(C), pages 248-263.
    13. repec:spr:revint:v:13:y:2018:i:1:d:10.1007_s11558-017-9282-3 is not listed on IDEAS
    14. Daron Acemoglu & Will Rafey, 2018. "Mirage on the Horizon: Geoengineering and Carbon Taxation Without Commitment," NBER Working Papers 24411, National Bureau of Economic Research, Inc.
    15. Pfrommer, Tobias, 2018. "A Model of Solar Radiation Management Liability," Working Papers 0644, University of Heidelberg, Department of Economics.
    16. Johannes Emmerling & Massimo Tavoni, 2017. "Quantifying Non-cooperative Climate Engineering," Working Papers 2017.58, Fondazione Eni Enrico Mattei.
    17. repec:spr:masfgc:v:22:y:2017:i:8:d:10.1007_s11027-016-9723-y is not listed on IDEAS

    More about this item

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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