Cooperation in a dynamic setting with asymmetric environmental valuation and responsibility

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2022

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info:eu-repo/semantics/altIdentifier/doi/10.1007/s13235-021-00395-y

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Francisco Cabo et al., « Cooperation in a dynamic setting with asymmetric environmental valuation and responsibility », HAL-SHS : économie et finance, ID : 10.1007/s13235-021-00395-y


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We analyze a dynamic environmental agreement between two regions. We assume that the agreement is jointly protable, because the eort associated with emission reductions is overcompensated by a cleaner environment in the future The two regions are asymmetric in two respects: their value of a cleaner environment is dierent, and they are responsible for the initial environmental problem in dierent ways. Because the benets of a cleaner environment cannot be transferred, we propose a mechanism on how to share the eorts of lowering current emissions, satisfying two main properties. The rst property is a benets pay principle: the greater one region's relative benet from cooperation, the greater must be its relative contribution. The second property is, a polluter pay principle: a region's relative contribution increases with its responsibility. Moreover, the sharing scheme must be time consistent. At any intermediate time, no country can do better by deviating from cooperation.*

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