Comparing environmental policy instruments in the presence of imperfect compliance - a case study

TitleComparing environmental policy instruments in the presence of imperfect compliance - a case study
Publication TypeJournal Article
Year of Publication2005
AuthorsRousseau, S, Proost S
JournalEnvironmental & Resource Economics
Volume32
Issue3
Pagination337-365
ISBN Number0924-6460
Abstract

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.

DOI10.1007/s10640-005-6646-6