Transcript Relevant Literature - University of California, Santa Barbara

Intro
• The tropical-climate belt has widened by
between 2 and 4.8 degrees of latitude between
1979 and 2005 – an expansion rate expected
only later this century.
• “By any measure, 2007 stands out as a critical
year, maybe even a turning point in efforts to
deal with climate change.” – Eileen Claussen,
president of the Pew Center for Global Climate
Change.
Relevant Literature
• Evolution of Property Rights (Rose)
• Open-Access Losses and Delay in the
Assignment of Property Rights (Libecap)
• Waiting to be Protected under the
Endangered Species Act: The Political
Economy of Regulatory Delay (Ando)
Motivation
• Talk of a “critical point”.
• By definition the crisis point is unknown
and must be unexpected.
– Argument: if agents expected a crisis they
would necessarily smooth
damages/costs/consumption and preempt
accordingly.*
Questions
Q. When does regulatory action occur?
A. At crisis point or when it is on the foreseeable
horizon.
Q. What characterizes the point when agents
recognize this crisis point?
A. Libecap: MR of coop > R of ind action. Info and
transaction costs fall enough; conversely
returns to regulation increase.
Dilemma: If agents could not foresee impending
crisis how could they even recognize it?
Questions
•
Problem of identifying the crisis point
beforehand.
–
–
•
•
Given we can recognize these factors which trigger
the recognition of a crisis point
Encouraging these factors (scarcity) would lead to
establishing of property rights => markets and
trading.
MC/MB analysis may not reflect ecological
state*.
Market and ecological crisis points can differ.*
–
Imperfect markets, prices not reflecting supply.