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Lobbying against Environmental Regulation vs. Lobbying for Loopholes

Author

Listed:
  • Andreas Polk
  • Armin Schmutzler

    () (Socioeconomic Institute, University of Zurich)

Abstract

We analyze the determinants of environmental policy when two firms engage in two types of lobbying against a restriction on allowed pollution: General lobbying increases the total amount of allowed pollution, which is beneficial for both firms. Private lobbying increases the individual pollution standard of the lobbying firm, but has a negative or zero effect on the allowed emissions of the competitor. We determine the lobbying equilibrium and discuss the resulting emission level. In many cases, a higher effectiveness of private lobbying is detrimental for firms and beneficial for environmental quality, as it induces firms to turn towards excessive amounts of relatively unproductive private lobbying.

Suggested Citation

  • Andreas Polk & Armin Schmutzler, 2003. "Lobbying against Environmental Regulation vs. Lobbying for Loopholes," SOI - Working Papers 0301, Socioeconomic Institute - University of Zurich.
  • Handle: RePEc:soz:wpaper:0301
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    References listed on IDEAS

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    1. Buehler, Stefan & Schmutzler, Armin & Benz, Men-Andri, 2004. "Infrastructure quality in deregulated industries: is there an underinvestment problem?," International Journal of Industrial Organization, Elsevier, vol. 22(2), pages 253-267, February.
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    1. repec:gam:jsusta:v:9:y:2017:i:8:p:1331-:d:106546 is not listed on IDEAS
    2. Rohling, Moritz & Ohndorf, Markus, 2012. "Prices vs. Quantities with fiscal cushioning," Resource and Energy Economics, Elsevier, vol. 34(2), pages 169-187.
    3. repec:eee:crpeac:v:24:y:2013:i:6:p:397-409 is not listed on IDEAS
    4. Niels Anger & Christoph Böhringer & Andreas Lange, 2015. "The political economy of energy tax differentiation across industries: theory and empirical evidence," Journal of Regulatory Economics, Springer, vol. 47(1), pages 78-98, February.
    5. Beard, Rodney & Mallawaarachchi, Thilak & Salerno, Gillian, 2007. "Environmental lobbying with imperfect monitoring of environmental quality," MPRA Paper 5346, University Library of Munich, Germany, revised Oct 2007.
    6. Polk, Andreas & Schmutzler, Armin, 2005. "Lobbying against environmental regulation vs. lobbying for loopholes," European Journal of Political Economy, Elsevier, vol. 21(4), pages 915-931, December.
    7. Daniel Halbheer & Sarah Niggli & Armin Schmutzler, 2006. "What Does it Take to Sell Environmental Policy? An Empirical Analysis of Referendum Data," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 33(4), pages 441-462, April.
    8. Kawahara, Shinya, 2011. "Electoral competition with environmental policy as a second best transfer," Resource and Energy Economics, Elsevier, vol. 33(3), pages 477-495, September.
    9. repec:kap:jeczfn:v:123:y:2018:i:3:d:10.1007_s00712-017-0575-z is not listed on IDEAS
    10. Jonathan Boston & Frieder Lempp, 2011. "Climate change: Explaining and solving the mismatch between scientific urgency and political inertia," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 24(8), pages 1000-1021, October.
    11. Aidt, Toke S., 2010. "Green taxes: Refunding rules and lobbying," Journal of Environmental Economics and Management, Elsevier, vol. 60(1), pages 31-43, July.
    12. Björn Kauder & Niklas Potrafke & Heinrich Ursprung, 2016. "Behavioral Determinants of Proclaimed Support for Environment Protection Policies," CESifo Working Paper Series 5993, CESifo Group Munich.
    13. Martin Gregor, 2011. "Corporate lobbying: A review of the recent literature," Working Papers IES 2011/32, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Nov 2011.

    More about this item

    Keywords

    environmental regulation; pollution standards; interest groups; lobbying; policy making;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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