Optimal Enforcement Policy and Firms' Emissions and Compliance with Environmental Taxes

Ines Macho-Stadler and David Perez-Castrillo

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: In a market where firms with different characteristics decide upon both the level of emissions and their reports, we study the optimal audit policy for an enforcement agency whose objective is to minimize the level of emissions. We show that it is optimal to devote the resources primarily to the easiest-to-monitor firms and to those firms that value pollution the less. Moreover, unless the budget for monitoring is very large, there are always firms that do not comply with the environmental objective and others that do comply; but all of them evade the environmental taxes.

Keywords: Environmental taxes; optimal audit policy. (search for similar items in EconPapers)
JEL-codes: D82 K32 K42 (search for similar items in EconPapers)
Pages: 26
Date: 2004-04-27
New Economics Papers: this item is included in nep-law
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Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Optimal Enforcement Policy and Firm's Emissions and Compliance with Environmental Taxes (2015)
Journal Article: Optimal enforcement policy and firms' emissions and compliance with environmental taxes (2006)
Working Paper: Optimal Enforcement Policy and Firms’ Emissions and Compliance with Environmental Taxes (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:612.04

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