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Stranlund, John K.; Chavez, Carlos A.. |
In this paper we examine the impacts of transaction costs on enforcing a transferable emissions permit system. We derive an enforcement strategy with a self-reporting requirement that achieves complete compliance in a cost-effective manner. In the absence of transaction costs targeted enforcement-the practice of monitoring some firms more closely than others-is neither necessary nor desirable. In the presence of constant marginal transaction costs, buyers of permits should be monitored more closely than sellers, but within groups of buyers and sellers monitoring should be uniform. When marginal transaction costs are not constant, effective monitoring will depend on whether a firm is a buyer or seller, its demand for permits relative to its initial... |
Tipo: Working or Discussion Paper |
Palavras-chave: Environmental Economics and Policy. |
Ano: 2004 |
URL: http://purl.umn.edu/14527 |
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Stranlund, John K.; Chavez, Carlos A.; Villena, Mauricio G.. |
We consider the pricing of a uniformly mixed pollutant when enforcement is costly with a model of optimal, possibly firm-specific, emissions taxes and their enforcement. We argue that optimality requires an enforcement strategy that induces full compliance by every firm. This holds whether or not regulators have complete information about firms’ abatement costs, the costs of monitoring them for compliance, or the costs of collecting penalties from noncompliant firms. Moreover, ignoring several unrealistic special cases, optimality requires discriminatory emissions taxes except when regulators are unable to observe firms’ abatement costs, the costs of monitoring individual firms, or any firm-specific characteristic that is known to be jointly distributed... |
Tipo: Working or Discussion Paper |
Palavras-chave: Compliance; Enforcement; Emissions Taxes; Monitoring; Asymmetric Information; Uncertainty; Environmental Economics and Policy; L51; Q58. |
Ano: 2007 |
URL: http://purl.umn.edu/7387 |
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