Non-point source regulation — A self-reporting mechanism

Information feasible regulatory mechanisms (that do not require the regulator to acquire firm level information) have been proposed long ago for stochastic non-point emission problems. These mechanisms do not take polluter cooperation and firm entry–exit incentives simultaneously into account, nor a...

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Bibliographic Details
Published in:Ecological economics 2007-05, Vol.62 (3), p.529-537
Main Authors: Hansen, Lars Gårn, Romstad, Eirik
Format: Article
Language:English
Subjects:
Corporate governance
Economic incentives
Enterprises
Environmental economics
Incentive mechanisms
Industry
Non-point emissions
Pollution
Regulation
Self-management
Truthful revelation
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Summary:Information feasible regulatory mechanisms (that do not require the regulator to acquire firm level information) have been proposed long ago for stochastic non-point emission problems. These mechanisms do not take polluter cooperation and firm entry–exit incentives simultaneously into account, nor are these issues addressed in an informationally efficient way. In this paper we propose an informationally feasible self-reporting mechanism that is robust to cooperation among polluters while giving participating firms correct abatement incentives as well as giving entry–exit incentives that are correct to a first order approximation.
ISSN:0921-8009
1873-6106
DOI:10.1016/j.ecolecon.2006.07.015