The Choice of Policy Instruments to Control Pollution under Costly Enforcement and Incomplete Information
نویسندگان
چکیده
We analyze the cost of enforcing a system of firm specific emissions standards vis a vis a transferable emissions permit system in the context of complete and incomplete information. We also examine the optimality of a transferable emissions permit system when abatement costs and enforcement costs are considered. We show that under incomplete information, regulation based on each firm-specific emissions standards cannot be less costly than a transferable emissions permit system. In addition, we find that the distribution of emissions that minimize aggregate program costs differ from the distribution of emissions generated by a competitive transferable emissions permit system.
منابع مشابه
The relative efficiency of environmental policy instruments in a second-best setting with costly monitoring and enforcement
In this paper we in corporate monitoring and enforcement aspects in the choice of environmental policy instruments in a general equilibrium framework. Goulder et al. (JPE, 1999) look into the choice of policy instruments in the presence of distortionary taxes. We extend this model by no longer assuming full compliance from the firms. A violating firm is caught with a certain probability by the ...
متن کاملPolicy instruments for pollution control in developing countries.
Economic development in developing countries must be accomplished in a manner that does not harm the environment with pollution. Pollution harms human health and productivity. Thus appropriate strategies must be developed that promote growth, reduce poverty, and protect the environment. A review of the current literature is performed with attention paid to cost-effective interventions i.e., ...
متن کاملThe Optimal Pricing of Pollution When Enforcement is Costly
We consider the pricing of a uniformly mixed pollutant with a model of optimal, possibly firm-specific, emissions taxes and their enforcement under incomplete information about firms’ abatement costs, enforcement costs, and pollution damage. We argue that optimality requires an enforcement strategy that induces full compliance by every firm, except possibly when a regulator can base the probabi...
متن کاملThe Design of Policy Instruments towards Sustainable Livestock Production in China: An Application of the Choice Experiment Method
In face of gradual ecological deterioration, the Chinese government has been in search of more efficient and effective mitigation policies, aiming to promote the sustainability of livestock production. However, researchers and policy makers seem to neglect a key issue: pinpoint policies are the most important, which means niche targeting is the premise before any policy design, such that better...
متن کاملWho Enforces Enforcement?: Can Public Prosecutors in Brazil Break the Endless Regress?
Enforcement is one of the greatest challenges in environmental policy-making. Even when policies are well-designed theoretically, they will not deliver the intended effects if the difficulties of enforcement are not explicitly incorporated in their design. Much of the rationale for the use of economic instruments is an attempt to economize on the informational requirements of policies and reduc...
متن کامل