<abstract xml:lang="en" xmlns="http://www.w3.org/1999/xhtml"><p>This paper presents how the environment - considered as a production factor - and other related assumptions can be introduced step by step in a theoretical Overlapping Generations General Equilibrium Model (OLG - GE). The first part shows the behaviors of agents with pollution in the absence of an environmental policy. The second part emphasizes a Greenhouse Gas abatement policy through the allocation of Pollution Permit ownership, which allows property rights on the environment; here we assume a three-factor model: Capital - Labor - Environment. The last part of of the paper highlights one theoretical property about the allocation of pollution permits within a OLG-GE steady state with the environment. To our knowledge, it is the first time that the aforementioned property has been characterized.</p></abstract>

This paper presents how the environment - considered as a production factor - and other related assumptions can be introduced step by step in a theoretical Overlapping Generations General Equilibrium Model (OLG - GE). The first part shows the behaviors of agents with pollution in the absence of an environmental policy. The second part emphasizes a Greenhouse Gas abatement policy through the allocation of Pollution Permit ownership, which allows property rights on the environment; here we assume a three-factor model: Capital - Labor - Environment. The last part of of the paper highlights one theoretical property about the allocation of pollution permits within a OLG-GE steady state with the environment. To our knowledge, it is the first time that the aforementioned property has been characterized.

Air Pollution, Allocation of Property Rights, Environmental Issues and Theoretical Overlapping Generations General Equilibrium Modelling

South East European Journal of Economics and Business

This paper presents how the environment - considered as a production factor - and other related assumptions can be introduced step by step in a theoretical...

Air Pollution, Allocation of Property Rights, Environmental Issues and Theoretical Overlapping Generations General Equilibrium Modelling

Published Online: Jun 03, 2011

Page range: 23 - 36

DOI: https://doi.org/10.2478/v10033-011-0003-1

Keywords
Environment Property Right, Pollution Permit Ownership, Environmental Maintenance, Air Pollution, OLG-GE model, Intergenerational Equity

This content is open access.

Air Pollution, Allocation of Property Rights, Environmental Issues and Theoretical Overlapping Generations General Equilibrium Modelling

Published Online: Jun 03, 2011

Page range: 23 - 36

DOI: https://doi.org/10.2478/v10033-011-0003-1

KeywordsEnvironment Property Right, Pollution Permit Ownership, Environmental Maintenance, Air Pollution, OLG-GE model, Intergenerational Equity

This content is open access.

Keywords
Environment Property Right, Pollution Permit Ownership, Environmental Maintenance, Air Pollution, OLG-GE model, Intergenerational Equity