On the Social Value of Disclosed Information and Environmental Regulation

Jihad Elnaboulsi, Wassim Daher and Yigit Saglam ()

No 2015-14, Working Papers from CRESE

Abstract: This paper presents an analysis of environmental policy in imperfectly competitive market with private information. We examine how environmental taxes should be optimally levied when the regulator faces asymmetric information about production and abatement costs in an irreversible observable policy commitment game. Under our setting, the paper investigates how information disclosure can improve the efficiency of the tax setting process and may offer an eficient complement to conventional regulatory approaches. From a policy perspective, our ?ndings suggest that access to publicly disclosed information improves the ability of the regulator to levy ?rms? speci?c environmental taxes. Despite its advantages, however, informational disclosure may harm the environmental policy it purports to enhance since it facilitates collusive behavior. We show that information sharing may occur and thus leads to a superior outcome in terms of industry output and emissions. Disclosure may undermine market performance and environmental policy.

Keywords: Environmental Regulation; Emissions Taxes; Collusion; Disclosed Information; Private Information; Information Sharing. (search for similar items in EconPapers)
JEL-codes: D81 D82 H23 L51 Q58 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2015-10
New Economics Papers: this item is included in nep-cta, nep-ene, nep-env, nep-law, nep-reg and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: On the Social Value of Disclosed Information and Environmental Regulation (2015)
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