Document Type
Article
Publication Date
9-9-2010
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.
Keywords
Environmental Law and Economics, Climate Change, Emission Trading System
Publication Title
American Economic Review (Papers and Proceedings)
Repository Citation
Sigman, Hilary A. and Chang, Howard F., "The Effect of Allowing Pollution Offsets with Imperfect Enforcement" (2010). All Faculty Scholarship. 324.
https://scholarship.law.upenn.edu/faculty_scholarship/324
Included in
Energy and Utilities Law Commons, Environmental Health and Protection Commons, Environmental Law Commons, Law and Economics Commons, Law and Society Commons, Law Enforcement and Corrections Commons, Other Economics Commons, Public Law and Legal Theory Commons
Publication Citation
101 Am. Econ. Rev. (Papers & Proc.) 268 (2011)