Document Type
Article - preprint
Department
Economics (CMC)
Publication Date
2009
Abstract
We model the optimal design of programs requiring heterogeneous firms to disclose harmful emissions when disclosure yields both direct and indirect benefits. The indirect benefit arises from the internalization of social costs and resulting reduction in emissions. The direct benefit results from the disclosure of previously private information which is valuable to potentially harmed parties. Previous theoretical and empirical analyses of such programs restrict attention to the former benefit while the stated motivation for such programs highlights the latter benefit. When disclosure yields both direct and indirect benefits, policymakers face a tradeoff between inducing truthful self-reporting and deterring emissions. Internalizing the social costs of emissions, such as through an emissions tax, will deter emissions, but may also reduce incentives for firms to truthfully report their emissions.
Rights Information
© 2009 Elsevier
Terms of Use & License Information
DOI
http://doi.org/10.1016/j.jeem.2008.08.003
Recommended Citation
Evans, Mary F., Scott M. Gilpatric, and Lirong Liu, Regulation with Direct Benefits of Information Disclosure and Imperfect Monitoring, Journal of Environmental Economics and Management 57: 284-292, 2009.
