Environmental inspection agencies have limited resources. A natural response to this shortage of resources is targeting and this targeting policy leads to higher compliance than random inspections. This paper uses individual inspection data on the inspection policy of the environmental agency...

Over time, inspection agencies gather information about firms that cause harmful externalities. This information may allow agencies to differentiate their monitoring strategies in the future, since inspections can be influenced by firms’ past performance relative to other competitors in the...

According to Becker (1968) it is best to use very high fines and low inspection probabilities to deter traffic accidents because inspection is costly. This paper uses a political economy model to analyse the choice of the fine and the inspection probability. There are two lobby groups: the...

When discussing tradable permit systems relating to water, three fundamentally different fields of application can be identified (Kraemer and Banholzer, 1999). Firstly tradable permits for water, or tradable water abstraction rights, can be used for quantitative water resource management....

Over time, inspection agencies gather information about firms’ pollution levels and this information may allow agencies to differentiate their monitoring strategies in the future. If a firm is less successful than its peers in reducing emissions, it faces the risk of being targeted for...

In this paper we analyze the allocation of allowances to Belgian industry during the first phase of EU ETS. Overall, Belgian industry was allocated long during phase 1 but there are marked differences between the regions. Allocations in Flanders were on average less generous than in the other...

Across countries and regions, we observe wide variations in the level of enforcement instruments (fines and inspections) that are used to reach compliance with environmental regulations. In this paper, we study whether the differences in enforcement policies can be justified from an efficiency...

Classical theory states that the optimal fine equals the damage caused by the crime divided by the probability of detection. But does such an optimal fine exist? We focus on emissions from production, and, even if we assume that the damage function is perfectly known, we still show that the...

We investigate whether environmental sanctions should increase with the degree of intentionality of the violation. To this end we develop a simple model which is used to make predictions concerning the effect of the degree of intentionality, the amount of illegal gain obtained and the harm...