The monopolistic polluter under environmental liability law: incentives for abatement and R&D

Alfred Endres () and Tim Friehe

Social Choice and Welfare, 2013, vol. 40, issue 3, 753-770

Abstract: This article analyzes the output, abatement, and investment decisions made by a monopolistic polluter under environmental liability law. The model applied considers both integrated and end-of-pipe abatement technologies. We find that in the case of fixed technology, in many instances negligence produces more favorable results than strict liability in terms of social welfare. The reason is that output under strict liability is always less than first-best output, whereas output under negligence is not similarly limited. However, this ranking of liability rules may be reversed when technology is endogenous. Under such conditions investment in both integrated and end-of-pipe abatement technologies under negligence is guided by motives foreign to the social planner, whereas the polluter’s calculus under strict liability is similar to that of the social planner. Copyright Springer-Verlag 2013

Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1007/s00355-011-0640-4 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Monopolistic Polluter under Environmental Liability Law: Incentives for Abatement and R&D (2011)
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:spr:sochwe:v:40:y:2013:i:3:p:753-770

Ordering information: This journal article can be ordered from
http://www.springer. ... c+theory/journal/355

DOI: 10.1007/s00355-011-0640-4

Access Statistics for this article

Social Choice and Welfare is currently edited by Bhaskar Dutta, Marc Fleurbaey, Elizabeth Maggie Penn and Clemens Puppe

More articles in Social Choice and Welfare from Springer, The Society for Social Choice and Welfare Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().