On the Social Value of Publicly Disclosed Information and Environmental Regulation

Elnaboulsi, Jihad; Daher, Wassim; Saglam, Yigit

doi:10.2139/ssrn.3510743

“…As highlighted by Weitzman (1974), engineers may fail to understand the magnitude of their task, which entails systematic errors in costs estimates. Uncertainties also re ‡ect di¤erent kind of …rms'expectations about production and abatement costs, 12 newly introduced products, 13 technological choice which is, after all, notoriously di¢ cult to predict, creating errors about future costs, 14 drifts and volatility of some inputs and energy commodities (whether oil, natural gas or coal) prices implying an increase in pollution-intensive output, 15 ... Cost uncertainties may further be exacerbated by political risks and swings, regulatory regimes and producers subjective probabilities of some exogenous stochastic economic shocks.…”

Section: Real-world Uncertaintiesmentioning

confidence: 99%

“…A large literature spanning the …eld of environmental economics has investigated emissions taxes under di¤erent informational structures (See for example, Christiansen and Smith, 2015;Elofsson, 2007; Espínola-Arredondo and Muñoz-García, 2015; Fikru and Gautier, 2016; Goulder and Parry, 2008;Heuson, 2010;Ikefuji et al, 2016;Mideksa and Weitzman, 2019;Pindyck, 2007;Pizer, 2002;Stavins, 1996Stavins, , 2020Weitzman, 1974;Zhao, 2003). 5 Here we set-up a model based on signaling games as in Elnaboulsi et al (2018). We adopt a linear-quadratic framework.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Environmental Taxation, Information Precision, and Information Sharing

Elnaboulsi

¹

,

Daher

²

,

Saglam

³

2020

SSRN Journal

Self Cite

2

0

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We analyze how environmental taxes should be optimally levied when the regulators and …rms face costs uncertainties in a Stackelberg-Cournot game. We allow linearquadratic payo¤s functions coupled with an a¢ ne information structure encompassing common and private information with noisy signals. In the …rst period, the regulator chooses the intensity of emissions taxes in order to reduce externalities. In the second period, facing industry-related and …rm-speci…c shocks, …rms compete in the marketplace as Cournot rivals and choose outputs. We show that, given costs uncertainties with non-uniform quality of signals across …rms, the regulator sets di¤erentiated tax policy. We also examined the social value of information under ex-ante calibrated emissions taxes. We argue that the magnitude of the associated social bene…ts and costs of more precise private signals hinge largely and fundamentally on the value of the ratio of the slopes of the marginal damage and the marginal consumer surplus. The lack of accurate data clouds the regulatory process by preventing the necessary …ne-tuning of the tax rules towards speci…c environmental circumstances. Finally, we investigate information sharing between polluters and its impacts on welfare. We stress that, when there are threats of severe environmental damages under deep uncertainties, collusion is welfare reducing and may jeopardize the regulatory process. Numerical simulations illustrate the results that the model delivers.

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“…In the direct regulation which is relatively strong, the media attention, in the form of market pressure, boosts the corporate investment in environmental protection; In the economics-based regulation which is relatively weak, media attention has a substitution effect (Cao et al , 2017; Gao et al , 2018). Furthermore, social media can focus public attention on certain events and topics, such as negative corporate information, through extensive and continuous coverage, which can greatly affect corporate reputation (Elnaboulsi et al , 2018). At the same time, to promote efficient and accurate supervision, it is necessary to strengthen the studies on the impact of the influence and authenticity (Cao et al , 2017) of the new media coverage on the corporate reputation effects.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Because of the lack of information, sudden environmental incidents often cause widespread public panic, which may result in secondary risk events, such as public protests, rumors and so on (Gao et al , 2018). Therefore, it is of particular importance for the government to adopt sustainable information disclosure (Bae and Yu, 2018; Elnaboulsi et al , 2018; Soumaya et al , 2018). Given the irreplaceable influence of the government and the public on the environmental behavior of enterprises, this paper attempts to discuss the integration effects of government information disclosure platform on the direct regulation of government and indirect regulation of public power.…”

Section: Introductionmentioning

confidence: 99%

The integration role of governmental information disclosure platform

Peng

¹

,

Tu

²

,

Liu

³

et al. 2019

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Purpose The purpose of this paper is to provide a feasible scheme for local governments to regulate corporate environmental data fraud and to discuss whether the influence of the construction of online information disclosure platform on the environmental behavior of enterprises is better than the offline spot check. Design/methodology/approach Under the background of changing environmental fees into taxes in China, this paper conducts evolutionary game analysis between local governments and enterprises in view of the existing problem of environmental data fraud. Furthermore, through the introduction of government information disclosure platform, this paper discusses the impact of the integration of direct government regulation and indirect public concern regulation on the evolution of environmental behavior of both sides. Finally, the evolutionary game is simulated by adopting system dynamics to analyses the implementation effect of different cases on the game process and game equilibrium. Findings The results showed that the introduction of information disclosure platform mechanism can effectively suppress the fluctuations existing in the game play and stabilize the game. Moreover, it is worth noting that the regulatory effect of local governments investing part of the monitoring cost in the construction of online information platform is proved to be better than that of putting all the monitoring cost into offline investigation. While optimizing the monitoring cost allocation, the local government still needs to attach great importance to organically combine the attention of the public and media with the governmental official platform. Practical implications The obtained results confirm that the proposed model can assist local government in refining the effects of their environmental regulatory decisions, especially in the case of corporate data fraud under environmental tax enforcement. Originality/value Previous literature only suggested that local governments should reduce the cost of supervision to change the corporate behavior to a better direction, but no further in-depth study. Thus, this study fills the gap by discussing the positive transformation effect of local government cost allocation scheme on corporate environmental behavior.

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Environmental taxation, information precision, and information sharing

Elnaboulsi¹,

Daher

²

,

Saglam

³

2022

J Public Economic Theory

Self Cite

View full text Add to dashboard Cite

We analyze how environmental taxes should be optimally levied when the regulators and …rms face costs uncertainties in a Stackelberg-Cournot game. We allow linearquadratic payo¤s functions coupled with an a¢ ne information structure encompassing common and private information with noisy signals. In the …rst period, the regulator chooses the intensity of emissions taxes in order to reduce externalities. In the second period, facing industry-related and …rm-speci…c shocks, …rms compete in the marketplace as Cournot rivals and choose outputs. We show that, given costs uncertainties with non-uniform quality of signals across …rms, the regulator sets di¤erentiated tax policy. We also examined the social value of information under ex-ante calibrated emissions taxes. We argue that the magnitude of the associated social bene…ts and costs of more precise private signals hinge largely and fundamentally on the value of the ratio of the slopes of the marginal damage and the marginal consumer surplus. The lack of accurate data clouds the regulatory process by preventing the necessary …ne-tuning of the tax rules towards speci…c environmental circumstances. Finally, we investigate information sharing between polluters and its impacts on welfare. We stress that, when there are threats of severe environmental damages under deep uncertainties, collusion is welfare reducing and may jeopardize the regulatory process. Numerical simulations illustrate the results that the model delivers.

show abstract

On the Social Value of Publicly Disclosed Information and Environmental Regulation

Cited by 4 publications

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Environmental Taxation, Information Precision, and Information Sharing

Environmental Taxation, Information Precision, and Information Sharing

The integration role of governmental information disclosure platform

Environmental taxation, information precision, and information sharing

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