Agreeing on efficient emissions reduction

Olivier Bos, Beatrice Roussillon () and Paul Schweinzer
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Beatrice Roussillon: UGA UFR FEG - Université Grenoble Alpes - Faculté d'Économie de Grenoble - UGA [2016-2019] - Université Grenoble Alpes [2016-2019], GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA [2016-2019] - Université Grenoble Alpes [2016-2019]

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Abstract: We propose a simple contest-based mechanism providing incentives to reduce harmful emissions to their efficient level without infringing upon productive efficiency. Participation in the most stylized form of the scheme is voluntary and individually rational; all rules are mutually agreeable and are unanimously adopted if proposed. The scheme balances its budget and requires no principal. In a perhaps more realistic stochastic output version, which could potentially inform policy decisions, we show that the transfers required by the efficient mechanism create a mutual insurance motive that can serve as an effective rationale for the (gradual) formation of international environmental agreements.

Keywords: climate policy; agreement; contest; global change; competitive examination; competitiveness; politique de l'environnement; changement climatique; concours; émission de carbone; compétitivité; accord international sur le climat; productivité (search for similar items in EconPapers)
Date: 2016
Note: View the original document on HAL open archive server: https://hal.science/hal-01484843v1
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Citations: View citations in EconPapers (2)

Published in Scandinavian Journal of Economics, 2016, 118 (4), pp.785-815. ⟨10.1111/sjoe.12164⟩

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Related works:
Journal Article: Agreeing on Efficient Emissions Reduction (2016)
Working Paper: Agreeing on Efficient Emissions Reduction (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01484843

DOI: 10.1111/sjoe.12164

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