Gary Libecap: Global environmental externalities, property rights, and public policy – Coase conference video
20 Apr 2015 Leave a comment
in economics of regulation, environmental economics, law and economics, property rights, Ronald Coase Tags: Coase conference, Gary Libecap
Addressing Global Environmental Externalities: Transaction Costs Considerations
20 Jun 2014 Leave a comment
in applied welfare economics, economics of climate change, Public Choice Tags: Gary Libecap, global commons, global environmental externalities, global warming, property rights, transaction costs
Gary D. Libecap, “Addressing Global Environmental Externalities: Transaction Costs Considerations.” Journal of Economic Literature (2014).
Abstract
Is there a way to understand why some global environmental externalities are addressed effectively, whereas others are not?
The transaction costs of defining the property rights to mitigation benefits and costs is a useful framework for such analysis. This approach views international cooperation as a contractual process among country leaders to assign those property rights.
Leaders cooperate when it serves domestic interests to do so. The demand for property rights comes from those who value and stand to gain from multilateral action.
Property rights are supplied by international agreements that specify resource access and use, assign costs and benefits including outlining the size and duration of compensating transfer payments, and determining who will pay and who will receive them.
Four factors raise the transaction costs of assigning property rights:
(i) scientific uncertainty regarding mitigation benefits and costs;
(ii) varying preferences and perceptions across heterogeneous populations;
(iii) asymmetric information; and
(iv) the extent of compliance and new entry.
These factors are used to examine the role of transaction costs in the establishment and allocation of property rights to provide globally valued national parks, implement the Convention on the International Trade in Endangered Species of Wild Fauna and Flora, execute the Montreal Protocol to manage emissions that damage the stratospheric ozone layer, set limits on harvest of highly-migratory ocean fish stocks, and control greenhouse gas emissions.
Utopia, you are standing in it! 
Recent Comments