Incomplete Environmental Regulation, Imperfect Competition, and Emissions Leakage
Meredith L. Fowlie
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| Article Citation |
Fowlie, Meredith L. 2009. "Incomplete Environmental Regulation, Imperfect Competition, and Emissions Leakage." American Economic Journal: Economic Policy, 1(2): 72–112.
DOI:10.1257/pol.1.2.72
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| Abstract |
Environmental regulation of industrial pollution is often incomplete;
regulations apply to only a subset of facilities contributing to a
pollution problem. Policymakers are increasingly concerned about
the emissions leakage that may occur if unregulated production can
be easily substituted for regulated production. This paper analyzes
emissions leakage in an incompletely regulated and imperfectly
competitive industry. The analytical model is used to simulate outcomes
under incomplete, market-based regulation of carbon dioxide
emissions in California's electricity sector. Regulation that exempts
out-of-state producers achieves approximately one-third of the total
emissions reductions achieved under complete regulation at more
than twice the cost per ton. (JEL L94, Q53, Q58)
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| Authors |
Fowlie, Meredith L. (U MI)
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| JEL Classifications |
L94: Electric Utilities
Q53: Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
Q58: Environmental Economics: Government Policy
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