The choice of policy instruments to control pollution under costly enforcement and incomplete information

Carlos Chavez, Mauricio Villena and John Stranlund ()

Journal of Applied Economics, 2009, vol. 12, 207-227

Abstract: 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.

Keywords: environmental policy; cost-effectiveness; enforcement costs; incomplete information (search for similar items in EconPapers)
JEL-codes: K32 K42 L51 Q28 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: The Choice of Policy Instruments to Control Pollution Under Costly Enforcement and Incomplete Information (2009)
Working Paper: The Choice of Policy Instruments to Control Pollution under Costly Enforcement and Incomplete Information (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:cem:jaecon:v:12:y:2009:n:2:p:207-227

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