choices. Thus, enforcement strategies for trading programs must account for not only the direct effects of enforcement on … compliance and emissions decisions, but also the indirect effects that occur because changes in enforcement can induce changes in … theoretical predictions, we find a direct effect of enforcement on individual violations, as well as a countervailing market …

risk-neutral firms and the marginal effectiveness of increased enforcement across firms are independent of differences in … emissions trading programs because it suggests that regulators have no justification for targeting their enforcement effort … the marginal effectiveness of enforcement depends on any firmspecific characteristic. We also examine the determinants of …

derive an enforcement strategy with a self-reporting requirement that achieves complete compliance in a cost-effective manner …. In the absence of transaction costs targeted enforcement—the practice of monitoring some firms more closely than others … initial distribution of permits can have an impact on total enforcement costs in the presence of transaction costs, but only …