Sharing the cost of cleaning up non-point source pollution

Sylvain Béal, David Lowing () and Léa Munich ()
Additional contact information
David Lowing: Laboratoire de Génie Industriel, CentraleSupélec, Université Paris-Saclay, France
Léa Munich: Université de Franche-Comté, CRESE, UR3190, F-25000 Besançon, France and Université de Lorraine, BETA, F-54000 Nancy, France

No 2024-13, Working Papers from CRESE

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.

Keywords: Cooperative game theory; Cost allocation; Pollution; liability (search for similar items in EconPapers)
JEL-codes: C71 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2024-06
New Economics Papers: this item is included in nep-des, nep-env, nep-gth and nep-inv
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Working Paper: Sharing the cost of cleaning up non-point source pollution (2024)
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