Grandfathering

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