Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 455: Targeted Enforcement and Aggregate Emissions With Uniform Emission Taxes
Jessica Coria () and Clara Villegas-Palacio ()
Additional contact information
Jessica Coria: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG
Clara Villegas-Palacio: Facultad de Minas. Universidad Nacional de Colombia &, Postal: Department of Economics., School of Business, Economics and Law, Göteborg University, Box 640, SE 40530 GÖTEBORG
Abstract: In practice, targeted monitoring seems to be a strategy frequently used by regulators. In this paper, we study the effects of targeted monitoring strategies on the adoption of a new abatement technology and, consequently, on the aggregate emissions level when firms are regulated with uniform taxes. The results suggest that a regulator aiming to stimulate technology adoption should decrease the adopters’ monitoring probability and/or increase the non-adopters’ monitoring probability. In contrast to previous literature, we find that, in some cases, a regulator whose objective is to minimize aggregate emissions should exert a stronger monitoring pressure on firms with higher abatement costs.
Keywords: technology adoption; environmental policy; imperfect compliance; targeted enforcement
37 pages, July 7, 2010
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