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Nonpoint Source Pollution When Polluters Might Cooperate

Author

Listed:
  • Millock Katrin

    () (CNRS, EUREQua)

  • Salanié François

    () (LERNA, INRA and Université Toulouse 1)

Abstract

In a model of nonpoint source pollution, we extend the theory of ambient taxes to the case when polluters might cooperate. We show that regulation through ambient taxes is severely constrained when the degree of cooperation among polluters is unknown to the regulator. On the other hand, if the regulator can invest in costly monitoring of emissions, then the optimal regulation offers a low ambient tax to cooperative groups and an optimal but costly individual emission tax to non-cooperative groups. This mechanism also has attractive properties when risk-aversion is introduced.

Suggested Citation

  • Millock Katrin & Salanié François, 2005. "Nonpoint Source Pollution When Polluters Might Cooperate," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-27, July.
  • Handle: RePEc:bpj:bejeap:v:topics.5:y:2005:i:1:n:12
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    Cited by:

    1. Wided Mattoussi & Paul Seabright, 2014. "Cooperation against Theft: A Test of Incentives for Water Management in Tunisia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(1), pages 124-153.
    2. Hamet SARR & Mohamed Ali BCHIR & François COCHARD & Anne ROZAN, 2016. "Nonpoint source pollution: An experimental investigation of the Average Pigouvian Tax," Working Papers 2016-05, CRESE.
    3. François Cochard & Marc Willinger & Anastasios Xepapadeas, 2005. "Efficiency of Nonpoint Source Pollution Instruments: An Experimental Study," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(4), pages 393-422, April.
    4. Mohamed Salah Matoussi & Wided Mattoussi, 2010. "On the Design of Total Water Use-Based Incentive Schemes for Sustainable Groundwater Management," Working Papers 575, Economic Research Forum, revised 12 Jan 2010.
    5. Hamet Sarr & Mohamed Bchir & Francois Cochard & Anne Rozan, 2016. "Nonpoint source pollution: An experimental investigation of the Average Pigouvian Tax," Working Papers hal-01375078, HAL.
    6. Hansen, Lars Garn & Romstad, Eirik, 2007. "Non-point source regulation -- A self-reporting mechanism," Ecological Economics, Elsevier, vol. 62(3-4), pages 529-537, May.
    7. Katrin Millock & Angels Xabadia & David Zilberman, 2009. "Investment Policy for New Environmental Monitoring Technologies to Manage Stock Externalities," Documents de travail du Centre d'Economie de la Sorbonne 09010, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    8. Collins, Alan R. & Maille, Peter, 2008. "Farmers as Producers of Clean Water: Getting Incentive Payments Right and Encouraging Farmer Participation," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6342, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Cason, Timothy N. & Gangadharan, Lata, 2013. "Empowering neighbors versus imposing regulations: An experimental analysis of pollution reduction schemes," Journal of Environmental Economics and Management, Elsevier, vol. 65(3), pages 469-484.
    10. Larry Karp, 2005. "Nonpoint Source Pollution Taxes and Excessive Tax Burden," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(2), pages 229-251, June.
    11. Millock, Katrin & Xabadia, Angels & Zilberman, David, 2012. "Policy for the adoption of new environmental monitoring technologies to manage stock externalities," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 102-116.

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