Deforestation as an externality problem to be solved efficiently and fairly
2011
Figuieres, Charles | MIDLER, Estelle
The international community recently agreed on a mechanism called REDD+ to reduce deforestation in tropical countries. However the mechanism, by its very nature, has no reason to induce a Pareto optimal reduction of deforestation. The aim of this article is to 10 propose an alternative class of mechanisms for negative externalities that implements Pareto optimal outcomes as Subgame Perfect Nash Equilibria, and that satis es some fairness properties, in particular two new axioms of Merit in Preserved Forest (called d-MPF and S-MPF). Outcomes are individually rational (IR) and the scheme does take into account environmental responsibility in the sense of our two axioms d-MPF and S-MPF. However, 15 envy freeness, even in a weak form adapted to the deforestation problem, turns out to be hard to achieve without dropping the other properties.
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