We develop an overlapping generations model of growth in which production generates harmful polluting emissions. In order to control pollution, the government implements an emission permits system. However, subject to political constraints, it is not able to assign the optimal quota on...

We contrast private and public ownership of environment in their ability to internalize the negative externality associated to the urge of the environment in the production process. This paper constructs a dynamic general equilibrium model with overlapping generations and property rights on...