Fair Division with General Equilibrium Effects and International Climate Politics

Böhringer, Christoph ; Helm, Carsten

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URL: http://ub-madoc.bib.uni-mannheim.de/449
URN: urn:nbn:de:bsz:180-madoc-4491
Document Type: Working paper
Year of publication: 2001
The title of a journal, publication series: None
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: D58 D63 Q20 ,
Subject headings (SWD): Emissionsverringerung , Klima / Umweltschutz , Entwicklungsländer
Abstract: This paper introduces a solution for the fair division of common property resources in production economies with multiple inputs and outputs. It is derived from complementing the Walrasian solution by welfare bounds, whose ethical justification rests on commonality of ownership. We then apply this solution to the question of burden sharing in the climate change regime, using an intertemporal computable general equilibrium model. For a wide range of initial allocations of CO2 emission rights, we find that developing countries should participate in emission reduction efforts in order to increase their global efficiency, but should also be fully compensated for their incremental abatement costs.
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