Firm behaviour under regulatory control of stochastic environmental wastes by probabilistic constraints

Beavis, Brian; Dobbs, Ian M.

doi:10.1016/0095-0696(87)90010-6

Cited by 34 publications

(16 citation statements)

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“…So, use of a proxy should not spuriously cause affirmative results. 6 One potential weakness is that the dummy variable approach does not account for the number of violations. An alternative measure that does so, in principle, would be the ratio of fines to violations over the past year.…”

Section: Discussionmentioning

confidence: 99%

“…In a simple deterministic one-pollutant model of the firm, overcomplying plants would have no reason to react further to enforcement, since they face no threat of sanction. However, plants with stochastic discharges may face some possibility of a fine from accidental discharges over the legal standard [6,7,12]. Many factors such as equipment failures, human error, or poor maintenance may cause realized discharges to differ from target, or intended, discharges during any particular time.…”

Section: Mechanisms For Enforcement-induced Changes In Over-compliancementioning

confidence: 99%

“…We later show that using the dummy approach in estimation is consistent with a two-state model of threat. 6 We also consider the impact of regulator actions on the sanctioned plant. Thus, we include a 0-1 dummy variable indicating whether that particular plant was fined in the previous year.…”

Section: Variablesmentioning

confidence: 99%

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Enforcement and over-compliance

Shimshack

Ward

2008

Journal of Environmental Economics and Management

143

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Economists generally view environmental enforcement as a tool to secure compliance with regulations. This paper demonstrates that credible enforcement significantly increases statutory over-compliance with regulations as well. We find that many plants with discharges typically below legally permitted levels reduce discharges further when regulators issue fines, even on other plants. Also, non-compliant plants often respond to sanctions by reducing discharges well beyond reductions required by law. Thus, increased enforcement generates substantial discharge reductions above and beyond those expected from simply deterring violations.JEL Classifications: K42; Q58; Q53

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Section: Discussionmentioning

confidence: 99%

Section: Mechanisms For Enforcement-induced Changes In Over-compliancementioning

confidence: 99%

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Enforcement and over-compliance

Shimshack

Ward

2008

Journal of Environmental Economics and Management

143

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“…With respect to uncertainty one has to mention Beavis and Walker (1983), which describes how uncertainty can be introduced into discharge models. Somewhat closer to our topic is Beavis and Dobbs (1987) although the focus on mean and percentile regulation is different from the consideration of deterministic entitlements (permits). Horan (2001) investigates how far first order stochastic dominance can or cannot be applied to establish cost efficiency of programs coming up with a negative answer.…”

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confidence: 98%

Abatement and Permits when Pollution is Uncertain and Violations are Fined

Wirl

Noll

2007

Environ Resource Econ

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“…Beavis and Walker (1983b) include emission trading and a fine if the firm's estimated mean emissions exceed its permit holdings. Beavis and Dobbs (1987) further analyze percentile as well as mean probabilistic constraints. In the latter paper, as in the present paper and in Wirl and Noll (2005), the fine for exceeding the constraint is a fixed amount.…”

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confidence: 99%

Group Rewards and Individual Sanctions in Environmental Policy

Dijkstra

Rübbelke

2007

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Group Rewards and Individual Sanctions in Environmental Policy SummaryWe examine an incentive scheme for a group of agents, where all agents are rewarded if the group meets its target. If the group does not meet its target, only the agents that meet their individual target are rewarded. In environmental policy, the EU burden sharing agreement and the UK Climate Change Agreements feature this incentive scheme. There is only a difference in outcome between group and individual rewards if emissions are stochastic. Group rewards generally lead to higher expected emissions than individual rewards. The attraction of the group reward scheme may lie in its fairness and its tough-looking targets.

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Firm behaviour under regulatory control of stochastic environmental wastes by probabilistic constraints

Cited by 34 publications

References 10 publications

Enforcement and over-compliance

Enforcement and over-compliance

Abatement and Permits when Pollution is Uncertain and Violations are Fined

Group Rewards and Individual Sanctions in Environmental Policy

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