Lobbying Against Environmental Regulation vs. Lobbying for Loopholes
Berlin School of Economics and Law
University of Zurich - Department of Economics; Centre for Economic Policy Research (CEPR)
U of Zurich, Socioeconomic Institute Working Paper No. 0301
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.
Number of Pages in PDF File: 36
Keywords: Environmental Regulation, Pollution Standards, Interest Groups, Lobbying, Policy Making
JEL Classification: D72, D78, L51
Date posted: March 13, 2003
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