Voluntary Pollution Abatement and Regulation

Michael S. Delgado and Neha Khanna

Agricultural and Resource Economics Review, 2015, vol. 44, issue 01, 20

Abstract: We consider private provision of an environmental public good and the link between voluntary pollution-abatement markets and the optimal level of mandatory environmental regulation. We show that voluntary abatement markets react to the level of mandatory abatement imposed and that an optimal regulatory policy must account for that reaction. We consider several assumptions about consumer behavior and find that the voluntary market’s reaction to regulation depends on the motivating behavior of consumers. Whether the optimal level of mandatory abatement is higher than the level provided by traditional settings depends on the direction and magnitude of the voluntary market’s reaction to changes in mandatory abatement.

Keywords: Consumer/Household Economics; Environmental Economics and Policy; Institutional and Behavioral Economics; Public Economics; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Voluntary Pollution Abatement and Regulation (2015)
Working Paper: Voluntary Pollution Abatement and Regulation (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:arerjl:200993

DOI: 10.22004/ag.econ.200993

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