Regulation of location-specific externalities

Publikation: Working paperForskning

Standard

Regulation of location-specific externalities. / Amundsen, Eirik S; Hansen, Lars Gårn; Whitta-Jacobsen, Hans Jørgen.

2018.

Publikation: Working paperForskning

Harvard

Amundsen, ES, Hansen, LG & Whitta-Jacobsen, HJ 2018 'Regulation of location-specific externalities'. <https://dx.doi.org/10.2139/ssrn.3284528>

APA

Amundsen, E. S., Hansen, L. G., & Whitta-Jacobsen, H. J. (2018). Regulation of location-specific externalities. Working Papers in Economics Nr. 9/18 https://dx.doi.org/10.2139/ssrn.3284528

Vancouver

Amundsen ES, Hansen LG, Whitta-Jacobsen HJ. Regulation of location-specific externalities. 2018 nov.

Author

Amundsen, Eirik S ; Hansen, Lars Gårn ; Whitta-Jacobsen, Hans Jørgen. / Regulation of location-specific externalities. 2018. (Working Papers in Economics; Nr. 9/18).

Bibtex

@techreport{d6d69d9209d34f52a53eb81fe38e951e,
title = "Regulation of location-specific externalities",
abstract = "In this paper, we study regulation of externalities involving many small-scale polluters, where the damages from emissions depend on the polluters{\textquoteright} locations. Examples include nutrient and pesticide emissions from farms, particulate emissions from vehicles and home heating units, emissions of hazardous chemical compounds from small business etc. With such emission problems, regulatory authorities often apply a combination of firm-level, possibly differentiated standards for {\textquoteleft}cleaner{\textquoteright} technologies, and market-level, undifferentiated dirty input regulations. We establish general principles for how such regulations should be designed and combined. We find that the optimal regulation design crucially depends on the type of cleaner technologies available to polluters. If these are {\textquoteleft}emission capturing{\textquoteright}, optimal technology standards encourage the use of cleaner technologies in both high and low damage areas, while if they are {\textquoteleft}input displacing{\textquoteright}, optimal technology regulation encourages cleaner technologies in high damage areas, but discourages their use in low damage areas. Regulation should always discourage the use of dirty input and the optimal regulation intensity may be substantial, particularly if the available cleaner technologies are input displacing.",
author = "Amundsen, {Eirik S} and Hansen, {Lars G{\aa}rn} and Whitta-Jacobsen, {Hans J{\o}rgen}",
year = "2018",
month = nov,
language = "English",
series = "Working Papers in Economics",
publisher = "Department of Economics, University og Bergen",
number = "9/18",
type = "WorkingPaper",
institution = "Department of Economics, University og Bergen",

}

RIS

TY - UNPB

T1 - Regulation of location-specific externalities

AU - Amundsen, Eirik S

AU - Hansen, Lars Gårn

AU - Whitta-Jacobsen, Hans Jørgen

PY - 2018/11

Y1 - 2018/11

N2 - In this paper, we study regulation of externalities involving many small-scale polluters, where the damages from emissions depend on the polluters’ locations. Examples include nutrient and pesticide emissions from farms, particulate emissions from vehicles and home heating units, emissions of hazardous chemical compounds from small business etc. With such emission problems, regulatory authorities often apply a combination of firm-level, possibly differentiated standards for ‘cleaner’ technologies, and market-level, undifferentiated dirty input regulations. We establish general principles for how such regulations should be designed and combined. We find that the optimal regulation design crucially depends on the type of cleaner technologies available to polluters. If these are ‘emission capturing’, optimal technology standards encourage the use of cleaner technologies in both high and low damage areas, while if they are ‘input displacing’, optimal technology regulation encourages cleaner technologies in high damage areas, but discourages their use in low damage areas. Regulation should always discourage the use of dirty input and the optimal regulation intensity may be substantial, particularly if the available cleaner technologies are input displacing.

AB - In this paper, we study regulation of externalities involving many small-scale polluters, where the damages from emissions depend on the polluters’ locations. Examples include nutrient and pesticide emissions from farms, particulate emissions from vehicles and home heating units, emissions of hazardous chemical compounds from small business etc. With such emission problems, regulatory authorities often apply a combination of firm-level, possibly differentiated standards for ‘cleaner’ technologies, and market-level, undifferentiated dirty input regulations. We establish general principles for how such regulations should be designed and combined. We find that the optimal regulation design crucially depends on the type of cleaner technologies available to polluters. If these are ‘emission capturing’, optimal technology standards encourage the use of cleaner technologies in both high and low damage areas, while if they are ‘input displacing’, optimal technology regulation encourages cleaner technologies in high damage areas, but discourages their use in low damage areas. Regulation should always discourage the use of dirty input and the optimal regulation intensity may be substantial, particularly if the available cleaner technologies are input displacing.

M3 - Working paper

T3 - Working Papers in Economics

BT - Regulation of location-specific externalities

ER -

ID: 218710072