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The Acid Rain Game as a Resource Allocation Process with an Application to the International Cooperation among Finland, Russia, and Estonia
(1993) Kaitala, Veijo; Mäler, Karl-Göran; Tulkens, Henry
"We consider optimal cooperation in transboundary air pollution abatement among several countries under incomplete information. The countries negotiate on establishing a gradual cooperative emission reduction program to reduce the damages caused by sulphur depositions. Local information available on the marginal emission abatement costs and damage costs allows one to determine directions of emission abatement in each country that converge to an economic optimum. A particular difficulty arising here is how the partners can guarantee that the costs and benefits from cooperation will be shared in such a way that none of them will be tempted to breach the agreement. To overcome this problem we make use of a cost sharing scheme proposed by Chander and Tulkens (1991), that results from appropriately designed international transfers. This scheme guarantees that the individual costs of all parties are nonincreasing along the path towards the optimum, and that no party or group of parties has an interest in proposing another abatement policy. The paper illustrates these methods by applying them to a three-country version of Maler's (1989) 'acid rain game', tailored to numerically simulate the negotiations on sulphur emissions abatement between Finland, Russia and Estonia."
The Atmosphere as an International Common Property Resource
(1988) Soroos, Marvin S.
"The impact of human activities on the atmosphere has become a global policy problem as scientific evidence has mounted on the transboundary effects of acid deposition on lakes and forests, a global warming trend attributable to a buildup of 'greenhouse' gases, and a depletion of the stratospheric ozone layer that can be linked to production of CFCs. These problems have been taken up by an extensive network of global and regional international institutions, in particular WMO, UNEP, ECE, and the ICSU. Extensive research on the condition of the atmosphere has been conducted since the IGY in 1957-8. As a common property resource, use of the atmosphere must be regulated internationally. Customary law has some applicability, but there is a need for further development of treaty law on emissions of specific air pollutants. Agreement on international regulations is hindered by differences of interest, concerns about equity, the limited ecological and technological means of some countries, and the temptation to be a free rider. While some progress has been made, especially in increasing scientific knowledge of the threats to the atmosphere, states must do much more to regulate pollutants and landuse practice."
Common Property, Regulatory Property, and Environmental Protection: Comparing Common Pool Resources to Tradable Environmental Allowances
(2000) Rose, Carol M.
"In Anglo-American law, there has been only very limited tolerance for traditional customary community management for CPRs. Indeed, community-based management regimes (CBMRs) have faced considerable hostility from American law in particular, on the grounds that customary communities obstruct free alienability of property, hinder opportunities to create wealth, and impede democratic governance. "Nevertheless, in recent decades, CBMRs have come to seem more attractive, particularly because they may offer new avenues to environmental management (as well as some degree of human rights protection for indigenous and traditional peoples). This paper will explore some of the strengths and weaknesses of traditional CBMRs in these dimensions. It will do so in part by drawing contrasts to a very different type of regime for environmental management, namely tradable environmental allocations (TEAs), as exemplified in sulfur dioxide quotas in the acid rain legislation of the United States, or in various programs for tradable individual fishing quotas in the United States and abroad. Among other things, the paper will compare the ways in which these very different regimes-- CBMRs and TEAs--set limits on total consumption of CPR resources, define individual entitlements to resource use, and provide for monitoring and enforcement. It will also discuss the different ways that these types of regimes respond to natural and commercial risk, and deal with resource scale and complexity."
Economic Theory and Environmental Degradation: A Survey of Some Problems
(1990) Mäler, Karl-Göran
"Both market and policy failures can lead to environmental degradation. Considerable progress has been made in the area of project evaluation and the valuation of environmental effect. On the other hand the analytical tools to study the effects of policy failures -the impact of taxes, prices, exchange rate and incentives- are more limited. The correct handling of uncertainty also remains a major issue. The analysis of intemational environmental problems, such as acid rain or CO2 buildup, may benefit from the application of game theory approaches and the use of revelation mechanisism designed for public goods."

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