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Profits from violating controls on the use of a polluting input

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  • Ing-Marie Andréasson-Gren

Abstract

Profits from violating the quota, charge and permit market systems are compared. The results indicate that, for a given permit price, the violation profits of the charge and permit market systems are the same and exceed the profits from violating a quota system if the optimal use of inputs in a compliant market is lower than the quota. It is also shown that, under a permit market system, the occurrence of violation decreases the equilibrium price of permits. This implies that the profits from violating a permit market are lower than violation profits of a charge system. Copyright Kluwer Academic Publishers 1992

Suggested Citation

  • Ing-Marie Andréasson-Gren, 1992. "Profits from violating controls on the use of a polluting input," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(5), pages 459-468, September.
    • Handle: RePEc:kap:enreec:v:2:y:1992:i:5:p:459-468
    DOI: 10.1007/BF00376829
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    References listed on IDEAS

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    Cited by:

    1. Agnar Sandmo, 2002. "Efficient Environmental Policy with Imperfect Compliance," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 23(1), pages 85-103, September.
    2. Hatcher, Aaron, 2005. "Non-compliance and the quota price in an ITQ fishery," Journal of Environmental Economics and Management, Elsevier, vol. 49(3), pages 427-436, May.
    3. Gren, Ing-Marie & Kaitala, Veijo, 1997. "Supervising skill information and violation of environmental regulations," International Review of Law and Economics, Elsevier, vol. 17(3), pages 395-407, September.

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