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How to pollute a river if you must

Yuzhi Yang, Erik Ansink and Jens Gudmundsson

Journal of Environmental Economics and Management, 2025, vol. 130, issue C

Abstract: We propose the river pollution claims problem to distribute a budget of emissions permits among agents located along a river. A key distinction from the standard claims problem is that agents are ordered exogenously. For environmental reasons, the specific location along the river where pollutants are emitted is an important concern. In our analysis, we combine this environmental concern with standard fairness considerations. We characterize the class of externality-adjusted proportional rules and show that they strike a balance between fairness and minimizing environmental damage in the river. We also propose two novel axioms that are motivated by the river pollution context and use them to characterize two priority rules. We illustrate the rules through a case study of the Tuojiang Basin in China.

Keywords: Claims problem; River pollution; Pollution permits; Externality-adjusted proportional rules; Priority rules (search for similar items in EconPapers)
JEL-codes: C71 D62 D63 Q25 (search for similar items in EconPapers)
Date: 2025
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Working Paper: How to Pollute a River If You Must (2024) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:130:y:2025:i:c:s0095069624001797

DOI: 10.1016/j.jeem.2024.103105

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Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

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