Shiftable Externalities: A Market Solution

Lars Hansen

Environmental & Resource Economics, 2002, vol. 21, issue 3, 239 pages

Abstract: In this paper we propose a regulatory scheme for what has become known as ‘shiftable’ externalities (‘Not In My Backyard’ type garbage location problemswhere the externality is characterized by the absence of jointness in supply).The scheme facilitates the establishment of a market for the externality, and it isfeasible for a wider class of regulation problems and more information efficientthan the other regulatory schemes that have been proposed for this type ofexternality. Finally, we show that it is possible to decentralize the participationdecision so as to take account of verification costs. Copyright Kluwer Academic Publishers 2002

Keywords: incentive mechanisms; shiftable externalities (search for similar items in EconPapers)
Date: 2002
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DOI: 10.1023/A:1014544516120

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