Tailored Regulation: Will Voluntary Site-Specific Performance Standards Necessarily Improve Welfare?

Allen Blackman () and James W. Boyd ()

Discussion Papers from Resources For the Future

Abstract: Increasingly popular tailored regulation (TR) initiatives like EPA’s Project XL allow plants to voluntarily substitute site-specific environmental performance standards for command-and-control regulations that dictate pollution abatement strategies. TR can significantly reduce participants’ costs of complying with environmental regulations. But in doing so, it can also provide participants with a competitive advantage. We show that this can have undesirable welfare consequences when it enables relatively inefficient firms in oligopolistic markets to "steal" market share from more efficient firms. One critical determinant of whether or not TR has such adverse welfare impacts is the regulator’s policy regarding the diffusion of TR agreements among non-participating firms.

New Economics Papers: this item is included in nep-reg
Date: 1999-12-01
View list of references View citations in EconPapers

Downloads: (external link)
http://www.rff.org/documents/RFF-DP-00-03-REV.pdf (application/pdf)

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:rff:dpaper:dp-00-03-rev

Access Statistics for this paper

More papers in Discussion Papers from Resources For the Future
Series data maintained by Webmaster ().