Martimort, David and Sand-Zantman, Wilfried (2012) Solving the GlobalWarming Problem: Beyond Markets, Simple Mechanisms May Help! TSE Working Paper, n. 12-340

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Abstract

This paper discusses the feasibility and performances of simple
mechanisms to implement international environmental agreements in the
multilateral externalities context of global warming. Asymmetric information
and voluntary participation by sovereign and heterogenous countries
are key constraints on the design of those agreements. Mechanisms must
prevent two sorts of free-riding problems - free riding in effort provision
and free riding in participation. As markets might fail to solve simultaneously
those two problems, we construct instead a simple menu of options
that trades off the provision of incentives for participating countries and the
provision of incentives to participate.With such mechanism, all countries voluntary
contribute to a fund, although at different intensities, but only the
most efficient ones effectively reduce their pollution below its “business as
usual” level.

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• Solving the GlobalWarming Problem: Beyond Markets, Simple Mechanisms May Help! (deposited 09 Jul 2014 17:29) [Currently Displayed]
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