Unpublished Paper
The Choice of Policy Instruments to Control Pollution under Costly Enforcement and Incomplete Information
Economics Department Working Paper Series
(2009)
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 found 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.
Disciplines
Publication Date
2009
Citation Information
Carlos Chávez, Mauricio Villena and JOHN K STRANLUND. "The Choice of Policy Instruments to Control Pollution under Costly Enforcement and Incomplete Information" Economics Department Working Paper Series (2009) Available at: http://works.bepress.com/john_stranlund/8/