Title

Policy persistence in environmental regulation

Campus Units

Economics, Center for Agricultural and Rural Development

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

2003

Journal or Book Title

Resource and Energy Economics

Volume

25

Issue

3

First Page or Article ID Number

255

Last Page

268

DOI

10.1016/S0928-7655(03)00031-9

Abstract

We study the optimal emission standards under uncertain pollution damages and transaction costs associated with policy changes in a dynamic setting. We consider three alternative forms of transactions costs and show that they can lead to different kinds of delays of policy changes or smaller scales of these changes. Thus, policy persistence can be a rational response of forward-looking policy makers to future transaction costs, rather than an inefficient outcome of the current political process.

JEL Classification

D8, Q2

Comments

This is a working paper of an article from Resource and Energy Economics 25 (2003): 255, doi: 10.1016/S0928-7655(03)00031-9.