Pollution control in the economic environment

Term Paper (Advanced seminar) , 2009 , 12 Pages , Grade: 1,3

Business economics - Law

Two liability schemes can be used by jurisdictions to ascertain firms comply with environmental protection. Strict liability enforces the companies to use appropriate care. However, the consumers have to be forced to protect themselves, too, by the use of the defence of contributory negligence. Then, the social optimal behaviour of both, the firm and the consumers is reached.
As for negligence, this may induce the firm to take appropriate care. However, as wealth among firms is heterogeneous, this does not necessarily hold for all firms. Additionally, negligence induces con-sumers to purchase too much.

Inhaltsverzeichnis

• The basics
• Choice of the liability rule
• The model
• Socially Optimal Locations and Levels of Care
• Strict liability and harmonization
• Negligence and cooperative regulation
• Competition among regulators
• Conclusion
• Literaturverzeichnis

Zielsetzung und Themenschwerpunkte

This paper explores the effectiveness of two liability schemes, strict liability and negligence, in achieving optimal pollution control. It examines the incentives these schemes provide to firms and consumers to reduce pollution and analyzes the potential for inefficient outcomes, particularly in the context of multiple jurisdictions.

• The efficiency of different liability schemes in pollution control
• The role of consumer behavior in pollution control
• The impact of multiple jurisdictions on pollution control
• The potential for strategic behavior by regulators
• The implications of harmonization of environmental standards

Zusammenfassung der Kapitel

The paper begins by introducing the two main liability schemes, strict liability and negligence, and their implications for firm behavior in a pollution context. It uses a simple example to illustrate how these schemes can lead to different outcomes in terms of firm care and consumer consumption. The paper then explores the choice of liability rule in a multi-jurisdictional setting, considering the potential for strategic behavior by regulators and the impact of harmonization of environmental standards.

Schlüsselwörter

The keywords and focus themes of the text include pollution control, liability schemes, strict liability, negligence, consumer behavior, multi-jurisdictional settings, strategic regulation, harmonization of environmental standards, and optimal outcomes.

• College: Otto-von-Guericke-University Magdeburg (Fakultät für Wirtschaftswissenschaft)
• Course: Law and Economics
• Grade: 1,3
• Author: Jessica Mohr (Author)
• Publication Year: 2009
• Pages: 12
• Catalog Number: V127110
• ISBN (eBook): 9783640349777
• ISBN (Book): 9783640349883
• Language: English
• Tags: Pollution, control, economic, environment, economics