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Emission Standards and Stochastic Waste Load

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  • Runar Brannlund
  • Karl-Gustaf Lofgren

Abstract

Empirical work regarding the impact of environmental regulations on firm behavior has been developed under the assumption that emissions of pollutants are deterministic. The implication is that the regulation is effective only when the constraint is exactly satisfied. In real life, however, it is seldom the case that emission constraints are exactly satisfied. The purpose of this paper is to find out whether regulation schemes are ineffective, or whether the structure is an optimal reaction to random fluctuations in emissions. The Swedish pulp and paper industry is used as an empirical illustration.

Suggested Citation

  • Runar Brannlund & Karl-Gustaf Lofgren, 1996. "Emission Standards and Stochastic Waste Load," Land Economics, University of Wisconsin Press, vol. 72(2), pages 218-230.
  • Handle: RePEc:uwp:landec:v:72:y:1996:i:2:p:218-230
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    References listed on IDEAS

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    Cited by:

    1. Mickwitz, Per, 2003. "Is it as bad as it sounds or as good as it looks? Experiences of Finnish water discharge limits," Ecological Economics, Elsevier, vol. 45(2), pages 237-254, June.
    2. Earnhart, Dietrich, 2007. "Effects of permitted effluent limits on environmental compliance levels," Ecological Economics, Elsevier, vol. 61(1), pages 178-193, February.
    3. Shimshack, Jay P. & Ward, Michael B., 2008. "Enforcement and over-compliance," Journal of Environmental Economics and Management, Elsevier, vol. 55(1), pages 90-105, January.
    4. Ghanem, Dalia & Zhang, Junjie, 2014. "‘Effortless Perfection:’ Do Chinese cities manipulate air pollution data?," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 203-225.
    5. Tommy Lundgren, 2003. "A Real Options Approach to Abatement Investments and Green Goodwill," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 17-31.
    6. Holstein, Fredrik & Gren, Ing-Marie, 2013. "Violation of environmental regulations in Sweden: Economic motives, environmental attitudes, and social capital," Working Paper Series 2013:3, Department Economics, Swedish University of Agricultural Sciences.
    7. Bengt Kristrom & Tommy Lundgren, 2003. "Abatement investments and green goodwill," Applied Economics, Taylor & Francis Journals, vol. 35(18), pages 1915-1921.

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