Market Power in the Eco-industry: Polluters’ Incentives under Environmental Liability Law
This paper analyzes the output and abatement choices of perfectly competitive downstream polluters who are subject to environmental liability law and procure abatement from an imperfectly competitive eco-industry. Under strict liability, polluting firms choose suboptimal abatement, but socially optimal output given abatement. Under negligence with firm-specific abatement standards, polluting firms choose suboptimal output but socially optimal abatement given output. Under negligence with industry-wide abatement standards, the output and abatement choices of most firms are socially suboptimal. Second-best considerations are offered for each case. Under strict liability (negligence), these apply to the level of liability (the behavioral standard).
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fullerton, Don & Wolverton, Ann, 2005.
"The two-part instrument in a second-best world,"
Journal of Public Economics,
Elsevier, vol. 89(9-10), pages 1961-1975, September.
- Ann Wolverton & Don Fullerton, 2003. "The Two-Part Instrument in a Second-Best World," NCEE Working Paper Series 200304, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2003.
- Don Fullerton & Ann Wolverton, 2003. "The Two-Part Instrument in a Second-Best World," NBER Working Papers 10140, National Bureau of Economic Research, Inc.
- Marie-Cécile Fagart & Claude Fluet, 2009. "Liability insurance under the negligence rule," RAND Journal of Economics, RAND Corporation, vol. 40(3), pages 486-508.
- Marie-Cécile Fagart & Claude Fluet, 2007. "Liability Insurance under the Negligence Rule," Cahiers de recherche 0730, CIRPEE.
- Endres,Alfred, 2011. "Environmental Economics," Cambridge Books, Cambridge University Press, number 9780521173926.
- Cristina Ciocirlan & Bruce Yandle, 2003. "The Political Economy of Green Taxation in OECD Countries," European Journal of Law and Economics, Springer, vol. 15(3), pages 203-218, May.
- Grischa Perino, 2010. "Technology Diffusion with Market Power in the Upstream Industry," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(4), pages 403-428, August.
- Grischa Perino, 2010. "Technology Diffusion with Market Power in the Upstream Industry," University of East Anglia Applied and Financial Economics Working Paper Series 005, School of Economics, University of East Anglia, Norwich, UK..
- Maia David & Bernard Sinclair-Desgagné, 2005. "Environmental Regulation and the Eco-Industry," Journal of Regulatory Economics, Springer, vol. 28(2), pages 141-155, 09.
- Maia David & Bernard Sinclair-Desgagné, 2004. "Environmental Regulation and the Eco-industry," CIRANO Working Papers 2004s-42, CIRANO.
- Maia David & Bernard Sinclair-Desgagné, 2005. "Environmental regulation and the eco-industry," Working Papers hal-00243019, HAL.
- Maia David & Bernard Sinclair-Desgagné, 2004. "Environmental Regulation and the Eco-Industry," Working Papers 2004/06, INRA, Economie Publique.
- Bernard Sinclair-Desgagné & Maia David, 2005. "Environmental Regulationand the Eco-Industry," Working Papers 2005.56, Fondazione Eni Enrico Mattei.
- Endres,Alfred, 2011. "Environmental Economics," Cambridge Books, Cambridge University Press, number 9781107002142, February.
- Miceli Thomas J., 2006. "On Negligence Rules and Self-Selection," Review of Law & Economics, De Gruyter, vol. 2(3), pages 349-361, October.
- Thomas J. Miceli, 2006. "On Negligence Rules and Self-Selection," Working papers 2006-26, University of Connecticut, Department of Economics.
- Anger, Niels & Böhringer, Christoph & Lange, Andreas, 2006. "Differentiation of Green Taxes: A Political-Economy Analysis for Germany," ZEW Discussion Papers 06-03, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Kahan, Marcel, 1989. "Causation and Incentives to Take Care under the Negligence Rule," The Journal of Legal Studies, University of Chicago Press, vol. 18(2), pages 427-447, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:uwp:landec:v:88:y:2012:i:1:p:121-138. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.