Local Pollution in Federal Systems
It is widely accepted that decentralized control of local pollution is inefficient if the central and the local authorities are imperfectly informed. This paper shows how the central authority can introduce a flexible grant-in-aid system that induces the local authority to use a weighted combination of local and central information when the local authority suffers from confirmatory bias. If the central authority is highly uncertain about the environmental effects of a specific pollutant, the tax/subsidy scheme can be designed to allow local information to play an essential role in the environmental policy. If the central authority is certain that a pollutant must not exceed a specific limit, the tax/subsidy scheme can be designed to allow local information little influence on the environmental policy. Copyright Kluwer Academic Publishers 2003
Year of publication: |
2003
|
---|---|
Authors: | Andersen, Per ; Jensen, Frank |
Published in: |
Environmental & Resource Economics. - European Association of Environmental and Resource Economists, ISSN 0924-6460. - Vol. 26.2003, 3, p. 417-428
|
Publisher: |
European Association of Environmental and Resource Economists |
Subject: | central information | federal systems and local information |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Amundsen, Eirik Schrøder, (2011)
-
Unequal treatment of identical polluters in Cournot equilibrium
Andersen, Per, (2005)
-
Unequal treatment of identical polluters in Cournot equilibium? : A note
Andersen, Per, (2002)
- More ...