  In this paper we deal with production situations where a cap or limit to the
amount of greenhouse gas emissions permitted is imposed. Fixing a tax for each
ton of pollutant emitted is also considered. We use bankruptcy rules to define
cooperative games with externalities associated with these situations and
analyze the existence of coalitionally stable allocations of the emission
permits. We prove that the constrained equal awards ( CEA ) rule provides
stable allocations and as a direct mechanism, it is incentive compatible. These
two facts have interesting managerial implications to control pollution
emissions.
