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Abstract

I consider a variation of Coasian bargaining as a policy instrument for internalizing intergenerational externalities. The variation involves appointing a contemporary party to represent the interests of the affected parties who are currently unable to represent themselves, either because they are too young or have not yet been born. Potential criticisms of such a policy are considered and addressed, and precedents to such a policy are put forth. A two period model is formulated to test the effectiveness of bargaining compared to a tax and subsidy regime and is found to be comparable and robust to parameter and model adjustments.

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