Carmen Arguedas, Dietrich Earnhart & Sandra Rousseau, Non-uniform implementation of uniform standards, Journal of Regulatory Economics vol. 51(2), 159-183 (doi: 10.1007/s11149-017-9321-2)
Regulations are frequently based on a uniform standard, which applies to all facilities within a single industry. However, implementation of many of these regulations does not lead to uniform limits due to considerations of local conditions in real policy settings. In this paper, we theoretically examine the relationships among the stringency of effluent limits imposed on individual polluting facilities by permit writers, environmental protection agencies’ monitoring decisions, and the ambient quality of the local environment. In particular, we explore the establishment of effluent limits when (1) the national emission standard represents only an upper bound on the local issuance of limits and (2) negotiation efforts expended by regulated polluting facilities and environmentally concerned citizens plays a role. We find that the negotiated discharge limit depends on the political weight enjoyed and the negotiation effort costs faced by both citizens and the regulated facility, along with the stringency of the national standard and local ambient quality conditions.
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