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On the regulation of unobserved emissions

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  • Tsur, Yacov
  • de Gorter, Harry

Abstract

Regulation of nonpoint source pollution often relies in one way or another on policy instruments based on ambient indicators. For well-known reasons, enforcement of ambient-based policies is, at best, limited. If no individual choices or actions are observed, than ambient-based regulation might be the only feasible approach. Often, some relevant individual indicators, such as output or certain inputs, are observable. For such cases, we offer a regulation mechanism that does away with ambient indicators. The mechanism implements the optimal output-abatement-emission allocation and gives rise to the full information outcome when the social cost of transfers is nil. Special attention is given to the regulation of (unobserved) abatement.

Suggested Citation

  • Tsur, Yacov & de Gorter, Harry, 2011. "On the regulation of unobserved emissions," Discussion Papers 116228, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
  • Handle: RePEc:ags:huaedp:116228
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    File URL: http://purl.umn.edu/116228
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    Keywords

    Nonpoint source pollution; abatement; asymmetric information; regulation mechanism; implementation.; Environmental Economics and Policy;

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