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ECONOMICS OF THE “CRITICAL USE” OF METHYL BROMIDE UNDER THE MONTREAL PROTOCOL
Author(s) -
DECANIO STEPHEN J.,
NORMAN CATHERINE S.
Publication year - 2005
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1093/cep/byi028
Subject(s) - montreal protocol , externality , willingness to pay , protocol (science) , economics , ozone layer , set (abstract data type) , public economics , business , microeconomics , computer science , medicine , physics , alternative medicine , pathology , meteorology , ozone , programming language
We analyze the economics of granting temporary exceptions to the phaseout of methyl bromide (MeBr) under the Montreal Protocol on Substances that Deplete the Ozone Layer. The protocol allows such exceptions based on technical or economic “feasibility” through a critical use exemption (CUE) process. Data compiled under the protocol make it possible to set forth criteria for the exceptions based on estimation of the benefits of compliance in terms of “willingness to pay” to abate the externality, as well as costs to the users creating the externality. We estimate a political willingness to pay and show that market and supply effects would reduce losses to MeBr users below estimates of such losses provided in CUE nominations. This suggests that the phaseout of MeBr can proceed with considerably fewer CUEs than requested by the parties. (JEL Q1 , Q2 , Q3 , H8 )