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Comparing Environmental Policy Instruments in the Presence of Imperfect Compliance – A Case Study

  • Sandra Rousseau

    ()

  • Stef Proost

In this paper, we aim to include rule making, implementation, monitoring and enforcement costs into the cost comparison of policy instruments. We use a simple partial equilibrium model and apply it to the textile industry. The model includes discrete abatement functions and costly monitoring and enforcement. The case study uses individual firm data to simulate the differences in abatement costs and compliance decisions between firms. We compare combinations of regulatory instruments (emission taxes, emission standards and technology standards) and enforcement instruments (criminal fines, civil fines and transaction offers). We show that the inclusion of information, monitoring and enforcement costs indeed alters the relative cost efficiency of the different instruments. Copyright Springer 2005

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File URL: http://hdl.handle.net/10.1007/s10640-005-6646-6
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Article provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.

Volume (Year): 32 (2005)
Issue (Month): 3 (November)
Pages: 337-365

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Handle: RePEc:kap:enreec:v:32:y:2005:i:3:p:337-365
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100263

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  1. Sandra Rousseau & Carole M. Billiet, 2003. "Using emission standards under incomplete compliance," Energy, Transport and Environment Working Papers Series ete0303, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
  2. Sandra Rousseau & Stef Proost, 2004. "The Relative Efficiency of Market-based Environmental Policy Instruments with Imperfect Compliance," Energy, Transport and Environment Working Papers Series ete0415, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
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