Fair and Lorenz Domination Solution of GHGs Emissions in Multilateral Cooperation of Global Warming Control

Treballs Finals del Màster d'Economia, Facultat d'Economia i Empresa, Universitat de Barcelona. Curs: 2021-2022, Tutor: Josep Maria Izquierdo Aznar; Pedro Calleja Cortes
Greenhouse gas(GHGs) emissions have resulted in global warming which further leads to climate change. To reduce GHGs emissions, governors make attempts to create multilateral agreements among countries. Their failure of establishing sustainable agreements drives researchers to find fair and equitable distribution rules. Based on Emission Egalitarianism for each individual, this paper creatively generates the generalized constraint equal awards rule (GEA), provides corresponding algorithm to compute emission allocations from the GEA rule and points out several characteristics of this rule. To determine a fairer rule, this paper introduces Lorenz dominance and proved in n-agent case that the allocation provided by the GEA rule is Lorenz-undominated by all other allocations from any other rules. Furthermore, in a simplified 2-agent case this paper confirmed the allocations derived from the GEA rule Lorenz dominates all other allocations from any other rules.