Environmental Rights Bib - Annotated Bibliography Example

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This article by Krutilla and Alexeeve (2014) focuses on the costs and the uncertainties that are involved when establishing the right over the use of resources. In short this paper deals with the risks and transactional cost that are involved during the establishment of…
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Environmental Rights Annotated Bib
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Annotated Bibliography Krutilla, K., & Alexeev, A. . The Political Transaction Costs and Uncertainties of Establishing Environmental Rights. Ecological Economics, 107, 299-309. doi:10.1016/j.ecolecon.2014.08.003
This article by Krutilla and Alexeeve (2014) focuses on the costs and the uncertainties that are involved when establishing the right over the use of resources. In short this paper deals with the risks and transactional cost that are involved during the establishment of environmental rights. Regulations that work to improve health, environment, safety, homeland security, sustainable forestry, and the management of natural resources are important in helping to establish rights over resources. Enviormental rights occupae essential position in policy making and hence these rights are not immune to political influences. The authors highlight that the current literature regarding environmental rights ignores the economic costs (transactional costs) such as welfare costs associated with the establishment of the right. The current literature therefore proposes that the only transactional costs involved are bribes and the like, which are of no economic significance. The whole economic literature also assumes that individuals are rational beings and hence the environmental policy making does not involve self-interest (Krutilla and Alexeeve, 2014). Through their article, the authors have tried to describe how transactional cost involved (such as welfare cost) can be reduced.
The most important theme of the paper is that environmental rights are an important policy making instrument. Generally, the rights are defined in terms of taxation or through a stipulated pollution level which acts as a control. This provides an incentive for polluters to reduce their emissions of harmful gasses thereby circumventing the high abatement costs. For this reason, polluters often oppose such developments because it costs them highly in terms of taxation and other economic costs. Even though environmentalists work to advocate pollution taxation, the result is the imposition of infra-marginal rents. As a result, a new political economy has erupted which operates trading programs for polluted emissions (Krutilla and Alexeeve, 2014).
The authors have provided a framework in order to model sharing of the environmental rights (Krutilla and Alexeeve, 2014). However, the authors have assumed an elastic demand for the polluters which means that they alone bear the taxation imposed on emissions. The authors however have made a good attempt at trying to quantify and monetize the welfare costs associated with the rights. The social, political, and economic aspects have been discussed very well by the authors due to the context of the issue. Towards the end, the authors own up the limitations to the modeling framework that is present in the article (Krutilla and Alexeeve, 2014). The model also has some assumptions regarding polluters which can alter the demand and supply curves in the model. Overall, the authors have tried to work out a way of charting the costs involved as well as the politics that governs the distribution of environmental rights based on a certain emission trading program. The economic variables and the assumptions made are important considerations especially as the demand has been assumed to be elastic. This has been used to highlight the differences between the abatement costs and infra-marginal rents that have come about. Read More
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