Tradable pollution permits in dynamic general equilibrium: can optimality and acceptability be reconciled?

Thierry Bréchet, Pierre-André Jouvet and Gilles Rotillon
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Gilles Rotillon: EconomiX, Univ. Paris Ouest, Nanterre - La Défense.

Working Papers from Chaire Economie du climat

Abstract: In this paper we study the optimal growth path and its decentralization in a twosector overlapping-generations model with pollution. One sector (power generation) is polluting and the other (final good) is not. Pollution is regulated by tradable emission permits. The issue is whether the optimal growth path can be replicated in equilibrium with pollution permits, given that some permits must be issued free of charge for the sake of political acceptability. We provide a policy rule that allows optimality and acceptability to be reconciled.

Keywords: general equilibrium; optimal growth; pollution; tradable emission permits; acceptability (search for similar items in EconPapers)
JEL-codes: D61 D9 Q28 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2011-02
New Economics Papers: this item is included in nep-dge, nep-ene, nep-env and nep-res
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http://www.chaireeconomieduclimat.org/RePEc/cec/wp ... _Jouvet_Rotillon.pdf First version, 2011 (application/pdf)

Related works:
Journal Article: Tradable pollution permits in dynamic general equilibrium: Can optimality and acceptability be reconciled? (2013)
Working Paper: Tradable pollution permits in dynamic general equilibrium: can optimality and acceptability be reconciled? (2013)
Working Paper: Tradable pollution permits in dynamic general equilibrium: can optimality and acceptability be reconciled? (2013)
Working Paper: Tradable pollution permits in dynamic general equilibrium: can optimality and acceptability be reconciled? (2010)
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