Grandfathering

31 Pages Posted: 29 Nov 2012 Last revised: 7 Dec 2012

See all articles by Maria Damon

Maria Damon

Independent

Daniel H. Cole

Indiana University Maurer School of Law; Indiana University School of Public and Environmental Affairs

Elinor Ostrom

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA); Indiana University Bloomington - Department of Political Science

Thomas Sterner

Göteborg University - Department of Economics

Date Written: November 29, 2012

Abstract

“Grandfathering” grants preferential treatment to existing polluters and resource users over new entrants based on prior use. It typically is justified as a doctrine to appease incumbents when passing costly regulations. It is based on conceptions of first-in-time or prior appropriation. The principle is applied in a very broad range of issues including environmental and resource use contexts ranging from the distribution of water rights, agricultural support, domestic pollution control, and international regimes, such as the Kyoto Protocol, which imposes obligations based on percentage reductions from historical baselines. This paper defines the concept universally and synthesizes legal, economic, and political science perspectives as well as interdisciplinary viewpoints on common property resource (CPR) use. We also explore, analytically and empirically, the dynamic incentives created by grandfathering and their implications for long-term resource use. Grandfathering removes incentives for individual users to anticipate stricter regulations and quite notably does the opposite, particularly when it forms the status quo distribution mechanism under new regulations or management systems. Using a series of case studies we analyze institutions ranging from long-enduring CPRs to global climate negotiations to demonstrate examples of how grandfathering can be detrimental to long run sustainability, and to discuss alternatives for avoiding or resolving the problems it creates.

Keywords: First in time, prior appropriation, grandfathering, incentives

Suggested Citation

Damon, Maria and Cole, Daniel H. and Ostrom, Elinor and Sterner, Thomas, Grandfathering (November 29, 2012). NYU Wagner Research Paper No. 2182573; Indiana University, Bloomington School of Public & Environmental Affairs Research Paper No. 2012-11-03. Available at SSRN: https://ssrn.com/abstract=2182573 or http://dx.doi.org/10.2139/ssrn.2182573

Maria Damon (Contact Author)

Independent

No Address Available

Daniel H. Cole

Indiana University Maurer School of Law ( email )

211 S. Indiana Avenue
Bloomington, IN 47405
United States

Indiana University School of Public and Environmental Affairs ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

Elinor Ostrom

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

Indiana University Bloomington - Department of Political Science

Bloomington, IN
United States

Thomas Sterner

Göteborg University - Department of Economics ( email )

Göteborg
Sweden

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