UNSPECIFIED (2002) The efficiency, equity and politics of emissions permit trading. In: Conference on the International Dimension of Environmental Policy, KERKRADE, NETHERLANDS, OCT, 2000SPRINGER.

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Abstract

This paper illustrates that an international permit trading system may hurt relatively poor countries by making associated economic activities unaffordable. A model is constructed in which the free market solution is Pareto inefficient as a result of pollution. The introduction of tradable permits allows pollution to be internalised, and brings about an increase in the total social surplus. But when incomes vary, this may not lead to a Pareto improvement; those in poor countries stop the polluting activity because they cannot afford to do otherwise. Only those in relatively rich countries are made better off. This may explain why poor countries are reluctant to ratify the Kyoto Protocol, itself advocating a permit-trading scheme. The politico-economic implications of permit trading are also examined. We show that the democratic requirements for ratification impose a lower bound on pollution reduction that can be achieved through a system of pollution permits with trade.

Item Type:	Conference Item (UNSPECIFIED)
Subjects:	H Social Sciences > HC Economic History and Conditions G Geography. Anthropology. Recreation > GE Environmental Sciences
Series Name:	ECONOMY & ENVIRONMENT
Journal or Publication Title:	ENVIRONMENTAL ECONOMICS AND THE INTERNATIOANAL ECONOMY
Publisher:	SPRINGER
ISBN:	1-4020-0841-4
Editor:	Marsiliani, L and Rauscher, M and Withagen, C
Date:	2002
Volume:	25
Number of Pages:	17
Page Range:	pp. 203-219
Publication Status:	Published
Title of Event:	Conference on the International Dimension of Environmental Policy
Location of Event:	KERKRADE, NETHERLANDS
Date(s) of Event:	OCT, 2000
URI:	http://wrap.warwick.ac.uk/id/eprint/8988

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