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Lobbying Against Environmental Regulation vs. Lobbying for Loopholes

U of Zurich, Socioeconomic Institute Working Paper No. 0301

36 Pages Posted: 13 Mar 2003  

Andreas Polk

Berlin School of Economics and Law

Armin Schmutzler

University of Zurich - Department of Economics; Centre for Economic Policy Research (CEPR)

Date Written: January 2003

Abstract

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.

Keywords: Environmental Regulation, Pollution Standards, Interest Groups, Lobbying, Policy Making

JEL Classification: D72, D78, L51

Suggested Citation

Polk, Andreas and Schmutzler, Armin, Lobbying Against Environmental Regulation vs. Lobbying for Loopholes (January 2003). U of Zurich, Socioeconomic Institute Working Paper No. 0301. Available at SSRN: https://ssrn.com/abstract=370440 or http://dx.doi.org/10.2139/ssrn.370440

Andreas Polk (Contact Author)

Berlin School of Economics and Law ( email )

Badensche Strasse 50-51
Berlin, D-10825
Germany
+49 30 85789162 (Phone)

Armin Schmutzler

University of Zurich - Department of Economics ( email )

Zürich, CH-8006
Switzerland

Centre for Economic Policy Research (CEPR) ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

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