Enforcing Pollution Control Laws in the U.S.

Downing, Paul B.; Kimball, James

doi:10.1111/j.1541-0072.1982.tb00236.x

Cited by 44 publications

(10 citation statements)

References 9 publications

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“…The primary aim of their paper is to demonstrate that the frequency of monitoring affects the level of pollutant discharge when discharges are stochastic. 3 This paper examines the consequences of noncompliance for a TDP market by formally incorporating noncompliant behavior in a standard market model.4 It does not attempt to characterize the optimal enforcement policy for such a market. Rather, it examines the effects of noncompliance given fairly general assumptions about the characteristics of the enforcement policy in place.…”

Section: Introductionmentioning

confidence: 99%

Markets for pollution control when firms are noncompliant

Malik

1990

Journal of Environmental Economics and Management

160

117

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The problem of noncompliance and enforcement in transferable discharge permit (TDP) markets has not received much attention. This paper examines the consequences of noncompliance for a TDP market given fairly general assumptions about the characteristics of the enforcement policy in place. The analysis reveals that when firms are noncompliant TDP markets retain their efficiency property only under some fairly stringent conditions. The effect of noncompliance on the equilibrium permit price raises some important questions about the ability of a TDP market to achieve, and remain in, equilibrium when firms are noncompliant.

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Section: Introductionmentioning

confidence: 99%

Markets for pollution control when firms are noncompliant

Malik

1990

Journal of Environmental Economics and Management

160

117

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“…As a result of limits to the effectiveness of enforcement strategies, regulators frequently establish cooperative rather than adversarial relationships with the parties they regulate, often failing to punish known violations. ( 40‐42 ) For example, Downing ( 16 ) states that: “Federal, state, and local agencies, water and air agencies, and agencies from throughout this and other countries … attempt to maintain a cooperative relationship with each source. Sources are given repeated opportunities to comply without penalty for failure … Compliance is delayed, often several years.…”

Section: Environmental Regulation As a Principal‐agent Problemmentioning

confidence: 99%

Should the Model for Risk‐Informed Regulation be Game Theory Rather than Decision Theory?

Bier

Lin

2012

Risk Analysis

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Risk analysts frequently view the regulation of risks as being largely a matter of decision theory. According to this view, risk analysis methods provide information on the likelihood and severity of various possible outcomes; this information should then be assessed using a decision-theoretic approach (such as cost/benefit analysis) to determine whether the risks are acceptable, and whether additional regulation is warranted. However, this view ignores the fact that in many industries (particularly industries that are technologically sophisticated and employ specialized risk and safety experts), risk analyses may be done by regulated firms, not by the regulator. Moreover, those firms may have more knowledge about the levels of safety at their own facilities than the regulator does. This creates a situation in which the regulated firm has both the opportunity-and often also the motive-to provide inaccurate (in particular, favorably biased) risk information to the regulator, and hence the regulator has reason to doubt the accuracy of the risk information provided by regulated parties. Researchers have argued that decision theory is capable of dealing with many such strategic interactions as well as game theory can. This is especially true in two-player, two-stage games in which the follower has a unique best strategy in response to the leader's strategy, as appears to be the case in the situation analyzed in this article. However, even in such cases, we agree with Cox that game-theoretic methods and concepts can still be useful. In particular, the tools of mechanism design, and especially the revelation principle, can simplify the analysis of such games because the revelation principle provides rigorous assurance that it is sufficient to analyze only games in which licensees truthfully report their risk levels, making the problem more manageable. Without that, it would generally be necessary to consider much more complicated forms of strategic behavior (including deception), to identify optimal regulatory strategies. Therefore, we believe that the types of regulatory interactions analyzed in this article are better modeled using game theory rather than decision theory. In particular, the goals of this article are to review the relevant literature in game theory and regulatory economics (to stimulate interest in this area among risk analysts), and to present illustrative results showing how the application of game theory can provide useful insights into the theory and practice of risk-informed regulation.

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“…Eran modelos estáticos donde se aceptaba que las empresas pudiesen desobedecer la ley y se comparaba la eficiencia de impuestos y cuotas. Aportaciones posteriores como las Storey y McCabe (1980), Downing y Kimball (1982), Beavis y Walker (1983), Linder y McBride (1984), siguieron la misma línea y proponían un análisis estático, donde las empresas reaccionaban a una multa esperada. Malik (1990) incorpora a este tipo de estudios la regulación a través de permisos negociables y examina su efectividad cuando los sistemas de inspección y vigilancia no son perfectos.…”

Section: Los Años De Plenitud: La Década De Los Ochentaunclassified

Las principales aportaciones a la teoría de la regulación medioambiental. Los últimos cuarenta años

Grau

2011

EARN

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RESUMEN:En este artículo analizo las principales aportaciones a la teoría de la regulación medioambiental desarrolladas durante los últimos cuarenta años. Inicio este recorrido en los años sesenta con la presentación de las primeras contribuciones. A continuación, abordo el estudio de la década de los setenta, donde me centro de manera preferente en la comparación de las propiedades de los sistemas basados en incentivos económicos y de los basados en cantidades. Seguidamente me adentro en los desarrollos que surgieron durante los ochenta, concentrando mi atención en el análisis de los sistemas de licencias negociables. Por último, analizo cómo en la década de los noventa la regulación medioambiental se orienta hacia la búsqueda de soluciones para los problemas de contaminación global. PALABRAS CLAVE: instrumentos regulación medioambiental.Clasificación JEL: Q58, Q50.

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Enforcing Pollution Control Laws in the U.S.

Cited by 44 publications

References 9 publications

Markets for pollution control when firms are noncompliant

Markets for pollution control when firms are noncompliant

Should the Model for Risk‐Informed Regulation be Game Theory Rather than Decision Theory?

Las principales aportaciones a la teoría de la regulación medioambiental. Los últimos cuarenta años

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