Nonpoint Source Pollution Regulation When Polluters Might Cooperate
Katti Millock, François Salanié
Peer monitoring,Co-operation,Voluntary abatement accords,Environmental regulation,Ambient tax,Incomplete information
Climate Change and Sustainable Development
We analyse the regulation of nonpoint source pollution. In particular, we study the use of peer monitoring to sustain co-operative abatement by a group of polluters. Delegation to a group of polluters has sometimes been proposed under a policy of so called voluntary abatement accords. By solving the problem of a regulator who a priori does not know whether agents are co-operative or not, we explain some features of voluntary abatement accords. The analysis shows that the policy measure proposed in the literature for nonpoint source regulation – an ambient tax – may not be efficient.