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Environmental applications of the Coase theorem
journal contribution
posted on 2023-06-09, 23:15 authored by Tatyana Deryugina, Frances Moore, Richard TolRichard TolThe Coase Theorem has a central place in the theory of environmental economics and regulation. Its applicability for solving real-world externality problems remains debated. We first place this seminal contribution in its historical context. We then survey the experimental literature that has tested the importance of the many, often tacit assumptions in the Coase Theorem. We discuss a selection of applications of the Coase Theorem to actual environmental problems, distinguishing between situations in which the polluter or the pollutee pays. Most substantive examples of Coase-like bargaining involve more than two parties. It is not clear whether the outcomes of these bargains were Pareto optimal rather than merely Pareto improving. While limited in scope, Coasian bargaining over externalities offers a pragmatic solution to problems that are difficult to solve in any other way.
History
Publication status
- Published
Journal
Environmental Science and PolicyISSN
1462-9011Publisher
ElsevierExternal DOI
Volume
120Page range
81-88Department affiliated with
- Economics Publications
Notes
Arxiv version https://arxiv.org/abs/2004.04247Full text available
- No
Peer reviewed?
- Yes
Legacy Posted Date
2021-03-08Usage metrics
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