Optimal Design of a Politically Feasible Environmental Regulation

Jongmin Yu and Seokjong Ryu
Additional contact information
Jongmin Yu: Hongik University
Seokjong Ryu: Shanghai University of Finance and Economics

Korean Economic Review, 2018, vol. 34, 75-99

Abstract: This paper discusses the optimal environmental regulation model that considers the political support of the regulated agents. We suggest a hybrid emission control policy pair, which combines a price (penalty) and a quantity control (emissions cap), and is efficient from the regulator’s perspective. Regulated companies choose one of the lowest-cost policy options within the pool of efficient hybrid policy pairs, and the regulator also prefers the most popular policy option with the smallest political resistance from the industry. This theoretic analysis provides an opportunity for policymakers to design acceptable regulation structures.

Keywords: Emission Trading; Price and Quantity; Hybrid Emission Control; Climate Change; Policy Instrument Choice (search for similar items in EconPapers)
JEL-codes: L51 Q28 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://keapaper.kea.ne.kr/RePEc/kea/keappr/KER-20180101-34-1-04.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: https://EconPapers.repec.org/RePEc:kea:keappr:ker-20180101-34-1-04

Access Statistics for this article

Korean Economic Review is currently edited by Kyung Hwan Baik

More articles in Korean Economic Review from Korean Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by KEA ().