Abstract

http://ssrn.com/abstract=1674913
 
 

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The Effect of Allowing Pollution Offsets with Imperfect Enforcement


Hilary Sigman


Rutgers University - Department of Economics; National Bureau of Economic Research (NBER)

Howard F. Chang


University of Pennsylvania Law School

September 9, 2010

University of Pennsylvania Institute for Law & Economics Research Paper No. 10-18

Abstract:     
Several pollution control regimes, including climate change policies, allow polluters in one sector subject to an emissions cap to offset excessive emissions in that sector with pollution abatement in another sector. The government may often find it more costly to verify offset claims than to verify compliance with emissions caps, and concerns about difficulties in enforcement may lead regulators to restrict the use of offsets. In this paper, we demonstrate that allowing offsets may increase pollution abatement and reduce illegal pollution, even if the government has a fixed enforcement budget. We explore the circumstances that may make it preferable to allow offsets when enforcement is costly.

Number of Pages in PDF File: 15

Keywords: Environmental Law and Economics, Climate Change, Emission Trading System

JEL Classification: K32, K42, Q53, Q54

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Date posted: September 11, 2010  

Suggested Citation

Sigman, Hilary and Chang, Howard F., The Effect of Allowing Pollution Offsets with Imperfect Enforcement (September 9, 2010). University of Pennsylvania Institute for Law & Economics Research Paper No. 10-18. Available at SSRN: http://ssrn.com/abstract=1674913 or http://dx.doi.org/10.2139/ssrn.1674913

Contact Information

Hilary A. Sigman
Rutgers University - Department of Economics ( email )
75 Hamilton Street
New Brunswick, NJ 08901
United States
HOME PAGE: http://econweb.rutgers.edu/sigman
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Howard F. Chang (Contact Author)
University of Pennsylvania Law School ( email )
3501 Sansom Street
Philadelphia, PA 19104
United States
215-573-8296 (Phone)
215-573-2025 (Fax)
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