This paper, under the situation of imperfectly enforceable pollution regulation, purposes to examine the effectiveness of major policy tools for pollution emission control through an extended emission charge model in which polluter's regulation avoidance activity is explicitly considered as an endogenous variable. The conclusion is that pollution regulation through an incentive system against opportunistic polluters who are attempting to avoid the regulation is not generally effective unless it is backed up with a high detection probability by a strong enforcement of the regulatory agency. In general, enforcement mechanism needs to be considered as importantly as incentive systems in the regulation of any intended violation, i.e., a forceful 'stick’ is required to make the 'carrot’ be really effective. [D6]
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Volume (Year): 9 (1995) Issue (Month): 3 (October) Pages: 89-109 Download reference. The following formats are available: HTML
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