Moral concerns on tradable pollution permits in international environmental agreements

Johan Eyckmans () and Snorre Kverndokk

Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: We investigate how moral concerns about permit trading affect an endogenous pollution permit trading equilibrium, where governments choose non-cooperatively the amount of permits they allocate to domestic industries. Politicians may feel reluctant to allow permit trading and/or may prefer that abatement is undertaken domestically due to moral concerns. This will have an effect on the initial permit allocations, and, therefore, on global emissions. The impact on global emissions depends on the precise formulation of the moral concerns, but under reasonable assumptions, we show that global emissions may increase. Thus, doing what is perceived as good does not always yield the desired outcome. However, this can be offset by restrictions on permit trading when governments have moral concerns about this trade.

Keywords: Tradable emission permits; international environmental agreements; non-cooperative game theory; moral motivation; identity. (search for similar items in EconPapers)
JEL-codes: D63 Q54 (search for similar items in EconPapers)
Date: 2009-06
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Moral concerns on tradable pollution permits in international environmental agreements (2010)
Working Paper: Moral Concerns on Tradable Pollution Permits in International Environmental Agreements (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:ces09.12

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