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Market Power in the Eco-Industry : Polluters' Incentives Under Environmental Liability Law

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2012

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Endres, Alfred

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http://nbn-resolving.de/urn:nbn:de:bsz:352-177897
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Land Economics. 2012, 88(1), pp. 121-138

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This paper analyzes the output and abatement choices of perfectly competitive downstream polluters who are subject to environmental liability law and procure abatement from an imperfectly competitive eco-industry. Under strict liability, polluting firms choose suboptimal abatement, but socially optimal output given abatement. Under negligence with firm-specific abatement standards, polluting firms choose suboptimal output but socially optimal abatement given output. Under negligence with industry-wide abatement standards, the output and abatement choices of most firms are socially suboptimal. Second-best considerations are offered for each case. Under strict liability (negligence), these apply to the level of liability (the behavioral standard).

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ISO 690FRIEHE, Tim, Alfred ENDRES, 2012. Market Power in the Eco-Industry : Polluters' Incentives Under Environmental Liability Law. In: Land Economics. 2012, 88(1), pp. 121-138
BibTex
@article{Friehe2012Marke-17789,
  year={2012},
  title={Market Power in the Eco-Industry : Polluters' Incentives Under Environmental Liability Law},
  number={1},
  volume={88},
  journal={Land Economics},
  pages={121--138},
  author={Friehe, Tim and Endres, Alfred}
}
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