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Citizen's participation in permit markets and social welfare under uncertainty

Author

Listed:
  • Olivier Rousse

    (équipe EDDEN - PACTE - Pacte, Laboratoire de sciences sociales - UPMF - Université Pierre Mendès France - Grenoble 2 - UJF - Université Joseph Fourier - Grenoble 1 - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - CNRS - Centre National de la Recherche Scientifique)

  • Benoît Sévi

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

There are now a number of small or medium-scale experiments where individuals can actively participate in permit markets. Where individuals retain permits, the remaining quota for polluting firms is decreased thereby theoretically increasing global welfare. This result lies on two major hypothesis: first, citizens have rational expectations and, second, they are risk-neutral. In this article, we provide theoretical arguments about the potential welfare-decreasing impact of citizen's participation when at least one of these assumptions is violated. Importantly, our conclusions lead, in some particular cases, to recommend a limited participation of individuals in permit schemes while encouraging a better diffusion of information toward this class of potential participants. This is the case, for instance, when scientific uncertainty about a phenomenon is strong and citizens cannot estimate the marginal abatement cost with confidence.

Suggested Citation

  • Olivier Rousse & Benoît Sévi, 2013. "Citizen's participation in permit markets and social welfare under uncertainty," Post-Print halshs-00814000, HAL.
  • Handle: RePEc:hal:journl:halshs-00814000
    DOI: 10.1016/j.envsci.2012.11.016
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    Cited by:

    1. Nasim Gholami & Mojtaba ANSARI & Mohammadjavad MAHDAVINEJAD, 2018. "A Scientometric Review Of Citizen Participation Research: World Trend," Theoretical and Empirical Researches in Urban Management, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 13(3), pages 37-53, August.
    2. Huiru Zhao & Sen Guo & Qi Zhang & Chunjie Li, 2014. "Social Welfare Evaluation of Electric Universal Service in China: From the Perspective of Sustainability," Sustainability, MDPI, vol. 6(8), pages 1-17, August.

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