Quota enforcement in resource industries: self-reporting and differentiated inspections
Research output: Working paper › Research
Standard
Quota enforcement in resource industries : self-reporting and differentiated inspections. / Hansen, Lars Gårn; Jensen, Frank; Nøstbakken, Linda.
Revised may 2011. ed. Institute of Food and Resource Economics, University of Copenhagen, 2011.Research output: Working paper › Research
Harvard
APA
Vancouver
Author
Bibtex
}
RIS
TY - UNPB
T1 - Quota enforcement in resource industries
T2 - self-reporting and differentiated inspections
AU - Hansen, Lars Gårn
AU - Jensen, Frank
AU - Nøstbakken, Linda
PY - 2011
Y1 - 2011
N2 - Quotas or permits are frequently used in the management of renewable resources and emissions. However, in many industries there is concern about the basic e ectiveness of quotas due to non-compliance. We develop an enforcement model of a quota-regulated resource and focus on a situation with signi cant non-compliance and exogenous constraints on nes and enforcement budget. We propose a new enforcement system based on self-reporting of excess extraction and explicit di erentiation of inspection rates based on compliance history. In particular, we use state-dependent enforcement to induce rms to self-report excess extraction. We show that such system increases the e ectiveness of quota management by allowing the regulator to implement a wider range of aggregate extraction targets than under traditional enforcement, while ensuring an ecient allocation of aggregate extraction. In addition, inspection costs can be reduced without reductions in welfare.
AB - Quotas or permits are frequently used in the management of renewable resources and emissions. However, in many industries there is concern about the basic e ectiveness of quotas due to non-compliance. We develop an enforcement model of a quota-regulated resource and focus on a situation with signi cant non-compliance and exogenous constraints on nes and enforcement budget. We propose a new enforcement system based on self-reporting of excess extraction and explicit di erentiation of inspection rates based on compliance history. In particular, we use state-dependent enforcement to induce rms to self-report excess extraction. We show that such system increases the e ectiveness of quota management by allowing the regulator to implement a wider range of aggregate extraction targets than under traditional enforcement, while ensuring an ecient allocation of aggregate extraction. In addition, inspection costs can be reduced without reductions in welfare.
M3 - Working paper
T3 - FOI Working Paper
BT - Quota enforcement in resource industries
PB - Institute of Food and Resource Economics, University of Copenhagen
ER -
ID: 33028446