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REGULATING EXTERNALITIES: WELFARE THEOREMS, CAP-AND-TRADE, AND PIGOUVIAN TAXES
2025-07-30
Time: 5:00 pm - 6:30 pm, July 30, 2025
Speaker: 端木昊随（哈尔滨工业大学）
Venue: 1F, Wanzhong Building, Langrun Garden, Peking University
Abstract:
The general equilibrium framework introduced by Anderson and Duanmu (2025a) incorporates cap-and-trade and emission taxation, the two most widely used regulatory schemes to control greenhouse gas emissions, into the Arrow–Debreu model. This paper extends that model by allowing externalities affecting production technologies. We show that the first welfare theorem fails in the presence of interdependent production technologies. In contrast, we establish versions of the second welfare theorem for these two regulatory schemes. Specifically, we show that every Pareto optimum can be decentralized both as a cap-and-trade equilibrium with transfers and as an emission tax equilibrium with transfers. This provides a rigorous foundation for Pigouvian taxation in general equilibrium economies with multiple agents.
Speaker:
端木昊随，国家高层次计划青年人才，哈尔滨工业大学数学研究院教授。他于2018年在加拿大多伦多大学取得统计学博士学位，于2018-2021年在加州大学伯克利分校从事博士后研究，于2021年加入哈尔滨工业大学数学研究院任教授。他的研究方向包括数理经济学，统计决策理论，非标准分析，马尔科夫链。他的主要研究工作发表于Econometrica, Journal of Economic Theory, Annals of Statistics, Biometrika, Memoirs of the AMS 等国际经济，统计和数学刊物。