Incomplete Environmental Regulation, Imperfect Competition, and Emissions Leakage

Meredith L. Fowlie

American Economic Journal: Economic Policy, 2009, vol. 1, issue 2, pages 72-112

Abstract: Environmental regulation of industrial pollution is often incomplete; regulations apply to only a subset of facilities contributing to a pollution problem. Policymakers are increasingly concerned about the emissions leakage that may occur if unregulated production can be easily substituted for regulated production. This paper analyzes emissions leakage in an incompletely regulated and imperfectly competitive industry. The analytical model is used to simulate outcomes under incomplete, market-based regulation of carbon dioxide emissions in California's electricity sector. Regulation that exempts out-of-state producers achieves approximately one-third of the total emissions reductions achieved under complete regulation at more than twice the cost per ton. (JEL L94, Q53, Q58)

Date: 2009
View citations in EconPapers

Downloads: (external link)
http://hdl.handle.net/10.1257/pol.1.2.72 (text/html)
http://www.aeaweb.org/articles.php?doi=10.1257/pol.1.2.72 (application/pdf)
http://www.aeaweb.org/aej/pol/data/2008-0011_data.zip dataset accompanying article (application/zip)
Access to full text is restricted to AEA members.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:aea:aejpol:v:1:y:2009:i:2:p:72-112

Ordering information: This journal article can be ordered from
http://www.aeaweb.org/subscribe.html

Access Statistics for this article

American Economic Journal: Economic Policy is edited by Alan J. Auerbach

More articles in American Economic Journal: Economic Policy from American Economic Association
Contact information at EDIRC.
Series data maintained by Christopher F. Baum ().