Intergenerational transfers of pollution rights and growth

Thierry Bréchet, Stéphane Lambrecht and Fabien Prieur

No 2005042, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We develop an overlapping generations growth model in which the individuals care about the environment. Many environmental policies suffer from institutional failures. We focus on the failure resulting from the delegation by the government of the exercise of the environmental policy to an administrative department. Though motivated by the department's expertise, the delegation principle may give rise to a conflict with social welfare maximization. This paper proposes an original policy mechanism of transfers of pollution rights capable of circumventing these failures and decentralizing optimal growth atcompetitive equilibrium.

Keywords: pollution; optimal growth; overlapping generations (search for similar items in EconPapers)
JEL-codes: D64 D91 Q20 (search for similar items in EconPapers)
Date: 2005-06
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2005042

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