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Joint Use of Liability and Regulation in Environmental Law

Author

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  • Michel, Stephan
  • Romano, Alessandro
  • Zannini, Ugo

Abstract

In this paper, we argue that the joint use of ex-ante regulation and ex-post liability rules is efficient when there are uncertainty surrounding causal investigations and regulatory myopia. As these conditions are generally met in environmental cases, we provide an explanation for the frequent coexistence of these two instruments to control activities that create a risk for the environment. Moreover, we suggest that a joint use of liability and regulation should more frequently be optimal at the European (Federal) level than at the Country (State) level.

Suggested Citation

  • Michel, Stephan & Romano, Alessandro & Zannini, Ugo, 2017. "Joint Use of Liability and Regulation in Environmental Law," ILE Working Paper Series 5, University of Hamburg, Institute of Law and Economics.
    • Handle: RePEc:zbw:ilewps:5
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    File URL: https://www.econstor.eu/bitstream/10419/157215/1/ile-wp-2017-5.pdf
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    References listed on IDEAS

    as
    1. Jonathan Aldred, 2012. "Climate change uncertainty, irreversibility and the precautionary principle," Cambridge Journal of Economics, Oxford University Press, vol. 36(5), pages 1051-1072.
    2. Aldred, Jonathan, 2013. "Justifying precautionary policies: Incommensurability and uncertainty," Ecological Economics, Elsevier, vol. 96(C), pages 132-140.
    3. Schmitz, Patrick W., 2000. "On the joint use of liability and safety regulation," International Review of Law and Economics, Elsevier, vol. 20(3), pages 371-382, September.
    4. Rouillon, Sebastien, 2008. "Safety regulation vs. liability with heterogeneous probabilities of suit," International Review of Law and Economics, Elsevier, vol. 28(2), pages 133-139, June.
    5. Michael G. Faure, 2014. "The complementary roles of liability, regulation and insurance in safety management: theory and practice," Journal of Risk Research, Taylor & Francis Journals, vol. 17(6), pages 689-707, June.
    6. Innes, Robert, 2004. "Enforcement costs, optimal sanctions, and the choice between ex-post liability and ex-ante regulation," International Review of Law and Economics, Elsevier, vol. 24(1), pages 29-48, March.
    7. Eberhard Feess & Gerd Muehlheusser & Ansgar Wohlschlegel, 2009. "Environmental liability under uncertain causation," European Journal of Law and Economics, Springer, vol. 28(2), pages 133-148, October.
    8. G.G.A. de Geest & G. Dari Mattiacci, 2005. "Soft Regulators, tough judges," Working Papers 05-06, Utrecht School of Economics.
    9. Helfand, W.H. & Lazarus, J. & Theerman, P., 2001. "Donora, Pennsylvania: An environmental disaster of the 20th century," American Journal of Public Health, American Public Health Association, vol. 91(4), pages 553-553.
    10. Bhole, Bharat & Wagner, Jeffrey, 2008. "The joint use of regulation and strict liability with multidimensional care and uncertain conviction," International Review of Law and Economics, Elsevier, vol. 28(2), pages 123-132, June.
    11. Alan Schwartz, 2000. "Statutory Interpretation, Capture, and Tort Law: The Regulatory Compliance Defense," Yale School of Management Working Papers ysm144, Yale School of Management.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Regulation; Liability; Joint Use; Causal Uncertainty; Regulatory Myopia; Precautionary Principle;
    All these keywords.

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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