Using emission standards under incomplete compliance
AbstractUsing the case study of water pollution in the Flemish textile industry, we discuss three empirical questions concerning the use of emission standards. We find that the Becker result ("maximal fine / minimal inspection") does not hold if we include rule making, implementation and enforcement costs into the model. There is a balance between the fine and the inspection variables. Making enforcement more stringent does not mean to put the fine levels as high as possible and only then increase the inspections. We have also shown that is extremely important to have correct estimates of people's willingness to pay for environmental improvement. These WTP estimates determine in great part the optimal environmental strategy and its associated optimal monitoring and enforcement policy. Moreover, it really pays off to optimise the monitoring and enforcement strategy associated with an emission standard. This optimisation does not necessarily mean that monitoring and enforcement should be as stringent as possible. It is often possible to obtain the desired result by some intermediate value of the monitoring and enforcement parameters. This is due to the balancing of costs and benefits associated with monitoring and enforcement.
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Bibliographic InfoPaper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment in its series Energy, Transport and Environment Working Papers Series with number ete0303.
Length: 18 pages
Date of creation: Jan 2003
Date of revision:
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Environmental Law; Illegal behaviour; Enforcement of Law;
Find related papers by JEL classification:
- K32 - Law and Economics - - Other Substantive Areas of Law - - - Environmental, Health, and Safety Law
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-02-03 (All new papers)
- NEP-CDM-2003-02-03 (Collective Decision-Making)
- NEP-ENE-2003-02-03 (Energy Economics)
- NEP-LAW-2003-02-03 (Law & Economics)
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- Sandra Rousseau & Stef Proost, 2005. "Comparing Environmental Policy Instruments in the Presence of Imperfect Compliance – A Case Study," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 32(3), pages 337-365, November.
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