We study the cost-effectiveness of a transferable emissions permit system (TEPS)
vis a vis a system of emissions standards. Our analysis includes along with
abatement costs, the costs of enforcing the system to induce compliance. Further,
the analysis considers complete and incomplete information. The numerical
simulations are performed for the case of fixed sources operating under the
Emissions Compensation Program (ECP) in Santiago, Chile. The results suggest
that a TEPS is not able to induce compliance at minimum enforcement costs, but
this regulatory system allow the regulator to achieve the environmental target
with minimum aggregate compliance costs.
Keywords:
Environmental policy, cost-effectiveness, enforcement costs, incomplete information
Clerger, G. (2016). Compliance costs of environmental regulation with incomplete information. Application to fixed sources of PCE in Santiago, Chile. Estudios De Economía, 36(2), pp. 165–190. Retrieved from https://estudiosdeeconomia.uchile.cl/index.php/EDE/article/view/40224
