This paper explores the outcome of an international environmental agreement when the governments are elected by their citizens. It also considers a voter's incentives for supporting candidates who are less green than she is. In the extreme case of ''global'' pollution, the elected politicians pay no attention to the environment, and the resulting international agreement is totally ineffective. Moreover, if governments cannot negotiate and have to decide noncooperatively (and voters are aware of this), the elected politicians can be greener, ecological damage can be lower and the median voter's payoff can be higher than in the case with bargaining.
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In the Dasgupta-Heal-Solow-Stiglitz model of capital accumulation and resource depletion we show the following equivalence: If an efficient path has constant (gross and net of population growth) savings rates, then population growth must be quasi-arithmetic and the path is a maximin or a classical utilitarian optimum. Conversely, if a path is optimal according to maximin or classical utilitarianism (with constant elasticity of marginal utility) under quasiarithmetic population growth, then the (gross and net of population growth) savings rates converge asymptotically to constants. JEL Code: Q10, Q32.
Abstract. We shed light on the Hartwick rule for capital accumulation and resource depletion by providing semantic clarifications and investigating the implications and relevance of this rule. We extend earlier results by establishing that the Hartwick rule does not indicate sustainability and does not require substitutability between man-made and natural capital. We use a new class of simple counterexamples (i) to obtain the novel finding that a negative value of net investments need not entail that utility is unsustainable, and (ii) to point out deficiencies in the literature.
Applying a willingness-to-pay approach known from contingent valuation in environmental economics we first develop an ordinally based specific measure for the size of individual sacrifice that is connected with an agent's contribution to a public good. We then construct a selection mechanism that picks the unique efficient solution among all allocations that have an equal sacrifice as defined in this way. We show that the solution thus obtained not only corresponds to the egalitarian equivalent public good allocation devised by Moulin but also that it has much in common with the much older Lindahl equilibrium. Moreover, the equal sacrifice solutions as characterized in this paper fulfil the ability-to-pay as well as the benefit principle.
JEL Classification Number: H41
In the framework of ethical social choice theory, sustainability is justified by Efficiency and Equity as ethical axioms. These axioms correspond to the Suppes-Sen Grading principle. In technologies that are productive in a certain sense, the set of Suppes-Sen maximal utility paths is shown to equal the set of non-decreasing and efficient paths. Since any such path is sustainable, Efficiency and Equity can thus be used to deem any unsustainable path as ethically unacceptable. This finding is contrasted with results that seem to indicate that an infinite number of generations cannot be treated equally.
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