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Multiple receptor ambient monitoring and firm compliance with environmental taxes under budget and target driven regulatory missions

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  • Colson, Gregory
  • Menapace, Luisa

Abstract

We analyze the potential for an environmental monitoring agency under different regulatory missions to use multiple measures of ambient pollution levels to induce firm compliance via endogenously determined probabilistic firm-level inspections of polluting activities. Departing from previous analyses, we consider a framework where the regulator has multiple, rather than a single, measures of ambient pollution in a setting where many firms are subject to a self-reported emissions tax that is not perfectly enforceable. Under a budget-driven mission, we show that a regulator can fruitfully utilize the added information from multiple ambient monitoring receptors to induce improved environmental compliance through the creation of strategic interactions among firms. Additionally, our results provide new evidence on the relative efficiency of budget- vs. target-driven environmental enforcement missions.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:jeeman:v:64:y:2012:i:3:p:390-401
    DOI: 10.1016/j.jeem.2012.03.002
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    References listed on IDEAS

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    1. repec:kap:regeco:v:51:y:2017:i:3:d:10.1007_s11149-017-9330-1 is not listed on IDEAS
    2. repec:eee:jeeman:v:84:y:2017:i:c:p:62-83 is not listed on IDEAS
    3. Andreas Oestreich, 2015. "Firms’ Emissions and Self-Reporting Under Competitive Audit Mechanisms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(4), pages 949-978, December.

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