A Montero payment mechanism for regulating non-point pollution emissions
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A Montero payment mechanism for regulating non-point pollution emissions. / Hansen, Lars Gårn.
In: Resource and Energy Economics, Vol. 61, 101166, 2020.Research output: Contribution to journal › Journal article › peer-review
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TY - JOUR
T1 - A Montero payment mechanism for regulating non-point pollution emissions
AU - Hansen, Lars Gårn
PY - 2020
Y1 - 2020
N2 - Regulating externalities from pollution is difficult when the regulator can not observe individual firms’ externality generation. Taxing the aggregate emissions of a group of polluters, which can often be observed, has been suggested. However, these taxes are vulnerable to collusion and strategic behavior, and they generate distorted entry-exit incentives. To address these disadvantages, I suggest combining an aggregate tax mechanism with the quota payment mechanism suggested by Montero for allocating emission quotas. The suggested tax system induces compliance with quotas and solves the noted problems for a subset of these regulation problems.
AB - Regulating externalities from pollution is difficult when the regulator can not observe individual firms’ externality generation. Taxing the aggregate emissions of a group of polluters, which can often be observed, has been suggested. However, these taxes are vulnerable to collusion and strategic behavior, and they generate distorted entry-exit incentives. To address these disadvantages, I suggest combining an aggregate tax mechanism with the quota payment mechanism suggested by Montero for allocating emission quotas. The suggested tax system induces compliance with quotas and solves the noted problems for a subset of these regulation problems.
U2 - 10.1016/j.reseneeco.2020.101166
DO - 10.1016/j.reseneeco.2020.101166
M3 - Journal article
VL - 61
JO - Resource and Energy Economics
JF - Resource and Energy Economics
SN - 0928-7655
M1 - 101166
ER -
ID: 241364947