IDEAS home Printed from https://ideas.repec.org/p/tin/wpaper/20240035.html
   My bibliography  Save this paper

Towards fully decentralized environmental regulation

Author

Listed:
  • Jens Gudmundsson

    (University of Copenhagen)

  • Jens Leth Hougaard

    (University of Copenhagen)

  • Erik Ansink

    (Vrije Universiteit Amsterdam)

Abstract

We take a decentralized approach to regulating environmental pollution in set- tings where each agent’s pollution possibly affects all others. There is no central agency to enforce pollution abatement or coordinate monetary transfers. Moreover, agents possess private information, which precludes deducing efficient abatement in general. We propose to implement transfer schemes through smart contracts to allow beneficiaries to compensate for abatement. We characterize all schemes that induce efficient abatement in unique dominant-strategy equilibrium. Moreover, appealing to classical fairness tenets, we pin down the “beneficiaries-compensates principle†. Supporting this principle through smart contracts provides a promising step towards decentralized coordination on environmental issues.

Suggested Citation

  • Jens Gudmundsson & Jens Leth Hougaard & Erik Ansink, 2024. "Towards fully decentralized environmental regulation," Tinbergen Institute Discussion Papers 24-035/VIII, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20240035
    as

    Download full text from publisher

    File URL: https://papers.tinbergen.nl/24035.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Pollution; Decentralization; Smart contracts; Beneficiaries-compensates principle;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tin:wpaper:20240035. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tinbergen Office +31 (0)10-4088900 (email available below). General contact details of provider: https://edirc.repec.org/data/tinbenl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.