Rights on What is Left: An Axiomatic Discussion of Grandfathering

23 Pages Posted: 9 Mar 2017 Last revised: 11 Dec 2017

See all articles by Jeremy Laurent-Lucchetti

Jeremy Laurent-Lucchetti

University of Geneva - Department of Economics

Justin Leroux

HEC Montreal - Institute of Applied Economics; CIRANO

Date Written: December 1, 2017

Abstract

Allocating property rights on an open-access resource that has been freely exploited in the past is often problematic. In practice, involved agents typically rely on one of two competing principles to determine future allocation. The first principle, grandfathering, favors the status quo while the other one, historical accountability, is a corrective justice argument. Using a conceptual framework inspired from the axiomatic literature on claims problems, we examine formally the relationship between the two principle. In particular, we show that both principles are actually not as incompatible as international climate negotiations make it sound. We then characterize allocation rules that correspond to extreme versions of the two principles. In particular, we show that sharing the remaining carbon budget in proportion to historical emissions---usually referred to as “the grandfathering rule”---is actually the most regressive sharing rule compatible with the grandfathering principle.

Keywords: distributive justice, tragedy of the commons, claims problems, axiomatic solutions, climate change

JEL Classification: D30, D63, D70, H23, Q2, Q3, Q56

Suggested Citation

Laurent-Lucchetti, Jeremy and Leroux, Justin, Rights on What is Left: An Axiomatic Discussion of Grandfathering (December 1, 2017). Available at SSRN: https://ssrn.com/abstract=2929653 or http://dx.doi.org/10.2139/ssrn.2929653

Jeremy Laurent-Lucchetti

University of Geneva - Department of Economics ( email )

102 Bd Carl Vogt
Geneva 4, 1211
Switzerland

Justin Leroux (Contact Author)

HEC Montreal - Institute of Applied Economics ( email )

3000, ch. de la Côte-Ste-Catherine
Montréal, Quebec H3T 2A7
Canada

CIRANO ( email )

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

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