Quota enforcement in resource industries: self-reporting and differentiated inspections

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningfagfællebedømt

Quotas are frequently used in the management of renewable resources and emissions. However, in many industries there is concern about their basic effectiveness due to non-compliance. We develop an enforcement model of a quota-regulated resource and focus on a situation with significant non-compliance and exogenous constraints on fines and enforcement budget. We propose a new enforcement system based on self-reporting of excess extraction and explicit differentiation of inspection rates depending on compliance history. We use differentiated inspections to induce firms to self-report excess extraction. This system increases the effectiveness of the quota by allowing the regulator to implement a wider range of aggregate extraction targets than under traditional enforcement, while ensuring an efficient allocation of extraction. In addition, inspection costs can be reduced without reductions in welfare.
Bidragets oversatte titelKvotehåndhævelse i ressource-industrier: selvangivelse og differentieret inspektion
OriginalsprogEngelsk
TidsskriftEnvironmental and Resource Economics
Vol/bind58
Udgave nummer4
Sider (fra-til)539-562
Antal sider24
ISSN0924-6460
DOI
StatusUdgivet - 2014

Bibliografisk note

Published online 4 August 2013

ID: 99926873