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Environmental enforcement with endogenous ambient monitoring

Author

Listed:
  • Laurent Franckx

    (K.U.Leuven, C.E.S., Energy, Transport and Environment
    Royal Military Academy)

Abstract

This paper extends a previous analysis by Franckx (2001). We consider an inspection game between n polluting firms and an environmental enforcement agency. If the cost of monitoring ambient pollution is low enough, the optimal inspection policy consists in, on the one hand, imposing the maximal possible fine, and, on the other hand, mixing between observing ambient pollution and not conducting any inspection at all. However, with stringent upper limits on the fine, the agency mixes between observing ambient pollution and inspecting all firms. The observation of ambient pollution is always followed by sequentially rational firm inspections.

Suggested Citation

  • Laurent Franckx, 2001. "Environmental enforcement with endogenous ambient monitoring," Energy, Transport and Environment Working Papers Series ete0115, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
    • Handle: RePEc:ete:etewps:ete0115
    as

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    File URL: http://feb.kuleuven.be/drc/Economics/misc/ete_workingpapers/ete-wp01-15.pdf
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    References listed on IDEAS

    as
    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    2. Segerson, Kathleen, 1988. "Uncertainty and incentives for nonpoint pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 87-98, March.
    3. Gould, John P., 1974. "Risk, stochastic preference, and the value of information," Journal of Economic Theory, Elsevier, vol. 8(1), pages 64-84, May.
    4. Hess, James, 1982. "Risk and the gain from information," Journal of Economic Theory, Elsevier, vol. 27(1), pages 231-238, June.
    5. Yves Zenou, 2003. "The Spatial Aspects of Crime," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 459-467, 04/05.
    6. Franckx Laurent, 2002. "Ambient environmental inspections and commitment towards enforcement policies: substitutes or complements?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-20, January.
    7. Jeroen C.J.M. van den Bergh (ed.), 1999. "Handbook of Environmental and Resource Economics," Books, Edward Elgar Publishing, number 801.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Deutsch, Yael & Goldberg, Noam & Perlman, Yael, 2019. "Incorporating monitoring technology and on-site inspections into an n-person inspection game," European Journal of Operational Research, Elsevier, vol. 274(2), pages 627-637.
    2. Dong, Xiaoqing & Li, Chaolin & Li, Ji & Wang, Jia & Huang, Wantao, 2010. "A game-theoretic analysis of implementation of cleaner production policies in the Chinese electroplating industry," Resources, Conservation & Recycling, Elsevier, vol. 54(12), pages 1442-1448.
    3. Dijkstra, Bouwe R. & Rübbelke, Dirk T.G., 2013. "Group rewards and individual sanctions in environmental policy," Resource and Energy Economics, Elsevier, vol. 35(1), pages 38-59.
    4. François Cochard & Julie Le Gallo & Laurent Franckx, 2015. "Regulation Of Pollution In The Laboratory: Random Inspections, Ambient Inspections, And Commitment Problems," Bulletin of Economic Research, Wiley Blackwell, vol. 67(S1), pages 40-73, December.
    5. Zhou, Xiaoxiao & Jia, Mengyu & Wang, Lu & Sharma, Gagan Deep & Zhao, Xin & Ma, Xiaowei, 2022. "Modelling and simulation of a four-group evolutionary game model for green innovation stakeholders: Contextual evidence in lens of sustainable development," Renewable Energy, Elsevier, vol. 197(C), pages 500-517.
    6. Colson, Gregory & Menapace, Luisa, 2012. "Multiple receptor ambient monitoring and firm compliance with environmental taxes under budget and target driven regulatory missions," Journal of Environmental Economics and Management, Elsevier, vol. 64(3), pages 390-401.

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    More about this item

    Keywords

    environmental enforcement; ambient inspections; commitment;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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