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A Damage Based Tax Mechanism for Regulation of Non-Point Emissions

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  • Lars Hansen

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Abstract

In a recent paper Segerson (1988) proposed a novel incentive mechanism for stochastic non-point emissions based on ambient pollution concentrations in nature. For specification of the mechanism when the damage function is nonlinear, the regulator must know polluters’ cost and emission functions. The mechanism also gives incentives to form coalitions among polluters, which, if they are formed, render the mechanism inefficient. In this paper we propose a revised mechanism which eliminates the need for knowledge of polluters’ cost and emission functions and reduces the probability of coalition forming. A standards and pricing version of the revised mechanism with both properties mentioned is also developed. Copyright Kluwer Academic Publishers 1998

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File URL: http://hdl.handle.net/10.1023/A:1008222900176
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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 12 (1998)
Issue (Month): 1 (July)
Pages: 99-112

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Handle: RePEc:kap:enreec:v:12:y:1998:i:1:p:99-112

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Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: incentive mechanisms; non-point emissions; JEL classification – D62; D82; L51;

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  1. Xepapadeas, A. P., 1991. "Environmental policy under imperfect information: Incentives and moral hazard," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 113-126, March.
  2. Joseph A. Herriges & Ramu Govindasamy & Jason F. Shogren, 1992. "Budget Balancing Incentive Mechanisms," Center for Agricultural and Rural Development (CARD) Publications 92-wp100, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  3. Segerson, Kathleen, 1988. "Uncertainty and incentives for nonpoint pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 87-98, March.
  4. Miceli, Thomas J. & Segerson, Kathleen, 1991. "Joint liability in torts: Marginal and infra-marginal efficiency," International Review of Law and Economics, Elsevier, vol. 11(3), pages 235-249, December.
  5. Cabe, Richard & Herriges, Joseph A., 1992. "The regulation of non-point-source pollution under imperfect and asymmetric information," Journal of Environmental Economics and Management, Elsevier, vol. 22(2), pages 134-146, March.
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