Strategic delegation and international permit markets: Why linking May fail

Habla, Wolfgang; Winkler, Ralph (2018). Strategic delegation and international permit markets: Why linking May fail. Journal of environmental economics and management, 92, pp. 244-250. Elsevier 10.1016/j.jeem.2018.09.006

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We analyse a delegation problem in the context of international climate policy. Principals in two countries first decide whether to merge domestic emission permit markets to an international market, then delegate the domestic permit supply to an agent. We find that principals select agents caring less for environmental damages than they do themselves in case of an international market regime, while they opt for self-representation in case of domestic markets. This strategic delegation incentive renders the linking of permit markets less attractive and constitutes a novel explanation for the reluctance to establish non-cooperative international permit markets.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Winkler, Ralph

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

0095-0696

Publisher:

Elsevier

Language:

English

Submitter:

Dino Collalti

Date Deposited:

24 Jun 2019 17:32

Last Modified:

12 Nov 2019 15:49

Publisher DOI:

10.1016/j.jeem.2018.09.006

BORIS DOI:

10.7892/boris.127509

URI:

https://boris.unibe.ch/id/eprint/127509

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