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A Laboratory Investigation of Compliance Behavior under Tradable Emissions Rights: Implications for Targeted Enforcement

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dc.contributor.authorMurphy, James J.
dc.contributor.authorStranlund, John
dc.contributor.departmentUniversity of Massachusetts Amherst
dc.contributor.departmentUniversity of Massachusetts Amherst
dc.date2023-09-22T21:07:19.000
dc.date.accessioned2024-04-26T19:59:48Z
dc.date.available2024-04-26T19:59:48Z
dc.date.issued2005-01-01
dc.descriptionWorking Paper 2005-1
dc.description.abstractThis paper uses laboratory experiments to test the theoretical observations that both the violations of competitive risk-neutral firms and the marginal effectiveness of increased enforcement across firms are independent of differences in their abatement costs and their initial allocations of permits. This conclusion has important implications for enforcing emissions trading programs because it suggests that regulators have no justification for targeting their enforcement effort based on firm-level characteristics. Consistent with the theory, we find that subjects’ violations were independent of parametric differences in their abatement costs. However, those subjects that were predicted to buy permits tended to have higher violation levels than those who were predicted to sell permits. Despite this, we find no statistically significant evidence that the marginal effectiveness of enforcement depends on any firmspecific characteristic. We also examine the determinants of compliance behavior under fixed emissions standards. As expected, we find significant differences between compliance behavior under fixed standards and emissions trading programs.
dc.identifier.doihttps://doi.org/10.7275/1290193
dc.identifier.urihttps://hdl.handle.net/20.500.14394/40002
dc.relation.urlhttps://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1213&context=peri_workingpapers&unstamped=1
dc.source.issue2005-1
dc.source.statuspublished
dc.subjectenforcement
dc.subjectcompliance
dc.subjectemissions trading
dc.subjectpermit markets
dc.subjectstandards
dc.subjectcommand-and-control
dc.subjectOther Economics
dc.titleA Laboratory Investigation of Compliance Behavior under Tradable Emissions Rights: Implications for Targeted Enforcement
dc.typearticle
dc.typearticle
digcom.contributor.authorMurphy, James J.
digcom.contributor.authorStranlund, John
digcom.identifierperi_workingpapers/201
digcom.identifier.contextkey1290193
digcom.identifier.submissionpathperi_workingpapers/201
dspace.entity.typePublication
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