How to pollute a river if you must

Yuzhi Yang*, Erik Ansink, Jens Gudmundsson

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

We propose the river pollution claims problem to distribute a budget of emissions permits among agents located along a river. A key distinction from the standard claims problem is that agents are ordered exogenously. For environmental reasons, the specific location along the river where pollutants are emitted is an important concern. In our analysis, we combine this environmental concern with standard fairness considerations. We characterize the class of externality-adjusted proportional rules and show that they strike a balance between fairness and minimizing environmental damage in the river. We also propose two novel axioms that are motivated by the river pollution context and use them to characterize two priority rules. We illustrate the rules through a case study of the Tuojiang Basin in China.
Original languageEnglish
Article number103105
Pages (from-to)1-11
Number of pages11
JournalJournal of Environmental Economics and Management
Volume130
DOIs
Publication statusPublished - Mar 2025

Funding

We thank Jens Leth Hougaard, Juan Moreno-Ternero and Hans-Peter Weikard for helpful comments. We are also grateful for suggestions by participants at the 2023 Lisbon Meetings in Game Theory and Applications, the 2023 World Conference on Natural Resource Modeling, and the seminar participants from the Department of Food and Resource Economics at University of Copenhagen. Finally, we thank the editor and two reviewers for constructive comments. Ansink gratefully acknowledges financial support from the European Union's Horizon Europe program (grant no. 101086522). Gudmundsson gratefully acknowledges financial support from the Independent Research Fund Denmark (grant no. 4260-00050B). We thank Jens Leth Hougaard, Juan Moreno-Ternero and Hans-Peter Weikard for helpful comments. We are also grateful for suggestions by participants at the 2023 Lisbon Meetings in Game Theory and Applications, the 2023 World Conference on Natural Resource Modeling, and the seminar participants from the Department of Food and Resource Economics at University of Copenhagen. Finally, we thank the editor and two reviewers for constructive comments. Ansink gratefully acknowledges financial support from the European Union’s Horizon Europe program (grant no. 101086522 . Gudmundsson gratefully acknowledges financial support from the Independent Research Fund Denmark (grant no. 4260-00050B ).

FundersFunder number
European Union's Horizon Europe program
Department of Food and Resource Economics at University of Copenhagen
European Union’s Horizon Europe program101086522
Independent Research Fund Denmark4260-00050B

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