Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155129
Authors: 
Blackman, Allen
Boyd, James
Year of Publication: 
2000
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 76. 2000
Abstract: 
Increasingly popular tailored regulation (TR) initiatives like EPA's Project XL allow plants to voluntarily substitute site-specific environmental performance standards for command-and-control regulations that dictate pollution abatement strategies. TR can significantly reduce participants' costs of complying with environmental regulations. But in doing so, it can also provide participants with a competitive advantage. We show that this can have undesirable welfare consequences when it enables relatively inefficient firms in oligopolistic markets to "steal" market share from more efficient firms. One critical determinant of whether or not TR has such adverse welfare impacts is the regulator's policy regarding the diffusion of TR agreements among non-participating firms.
Subjects: 
Tailored regulation
voluntary regulation
site-specific
performance standards
regulatory reform
JEL: 
Q28
L13
L51
K32
Document Type: 
Working Paper

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