On the regulation of unobserved emissions

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.


Issue Date:
2011
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/116228
Total Pages:
29
Series Statement:
Discussion Papers
2.11




 Record created 2017-04-01, last modified 2017-08-26

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