Negotiating the initial permits allocation as a revelation mechanism in non point source pollution
La négociation de l'allocation initiale de permis comme mécanisme de révélation : le cas de la pollution diffuse
Résumé
Non point source pollution is characterized by the fact that individual emissions are not observable at a reasonable cost. This constitutes a moral hazard problem. Furthermore, we explicitly consider adverse selection, a second type of asymmetric information that arises because of the difficulty to differentiate the polluters with respect to their type (marginal benefit of polluting). In this paper, we design a tradable permits market between non point sources of pollution in the vein of Taylor (2003). In order to involve all the polluters contributing to a measured ambient pollution, we consider a collective performance based mechanism. This sanction mechanism is activated if the collective fails to build itself. The threat remains active along a negotiation process in order to make it converge to the equilibrium solution. Indeed, the agents are induced to reveal their real type (polluter, non polluter) through a negotiation on their initial allocation of permits.
Domaines
Sciences de l'Homme et Société
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