carbon tax. In this paper, we consider and compare the enforcement problems associated with a tax regime and a cap …-and-trade regime, respectively. The paper tries to convey two main points. First, both types of regime require an effective enforcement … political process leading up to its adoption tends to water down the enforcement mechanism to a point where it no longer has …

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 …