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The effects of compliance uncertaint...

Srivastava, Lorie.

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The effects of compliance uncertainty on flexible environmental performance standards: Total maximum daily loads in Michigan.

Record Type:	Electronic resources : Monograph/item
Title/Author:	The effects of compliance uncertainty on flexible environmental performance standards: Total maximum daily loads in Michigan./
Author:	Srivastava, Lorie.
Description:	160 p.
Notes:	Source: Dissertation Abstracts International, Volume: 65-04, Section: A, page: 1476.
Contained By:	Dissertation Abstracts International65-04A.
Subject:	Economics, Agricultural. -
Online resource:	http://pqdd.sinica.edu.tw/twdaoapp/servlet/advanced?query=3129544
ISBN:	0496768034

The effects of compliance uncertainty on flexible environmental performance standards: Total maximum daily loads in Michigan.
Srivastava, Lorie.

The effects of compliance uncertainty on flexible environmental performance standards: Total maximum daily loads in Michigan. - 160 p.

Source: Dissertation Abstracts International, Volume: 65-04, Section: A, page: 1476.

Thesis (Ph.D.)--Michigan State University, 2004.

Interest in flexible environmental performance standards for regulating nonpoint source pollution has been increasing. This rise in interest is partially due to such perceived benefits as the provision of dynamic incentives that allow firms to be technologically innovative, improving the cost-effectiveness of environmental regulations. These cost savings that may arise are due to decreases in compliance costs for the regulated firm, and are termed innovation offsets by Porter and Van der Lynde in the Porter Hypothesis.

ISBN: 0496768034Subjects--Topical Terms:

626648
Economics, Agricultural.

The effects of compliance uncertainty on flexible environmental performance standards: Total maximum daily loads in Michigan.
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100 1 $a Srivastava, Lorie. $3 1938322
245 1 4 $a The effects of compliance uncertainty on flexible environmental performance standards: Total maximum daily loads in Michigan.
300 $a 160 p.
500 $a Source: Dissertation Abstracts International, Volume: 65-04, Section: A, page: 1476.
500 $a Adviser: Sandra S. Batie.
502 $a Thesis (Ph.D.)--Michigan State University, 2004.
520 $a Interest in flexible environmental performance standards for regulating nonpoint source pollution has been increasing. This rise in interest is partially due to such perceived benefits as the provision of dynamic incentives that allow firms to be technologically innovative, improving the cost-effectiveness of environmental regulations. These cost savings that may arise are due to decreases in compliance costs for the regulated firm, and are termed innovation offsets by Porter and Van der Lynde in the Porter Hypothesis.
520 $a In the case of nonpoint sources of pollution, however, transaction costs---due to compliance uncertainty---may be so high that they may negate any possible benefits, limiting the feasibility of flexible environmental performance standards as a policy tool. Regulators and farmers suffer from compliance uncertainty. Regulators experience compliance uncertainty due to (a) unobservable effluent, (b) incomplete knowledge on their behalf with respect to understanding the fate and transport of effluent from nonpoint sources and its stochastic characteristics, and (c) opportunistic behavior by farmers due to asymmetric information leading to moral hazard. Farmers suffer from compliance uncertainty with respect to whether their actions or effort will be deemed sufficient for compliance with flexible performance standards. Even if farmers would like to comply, liability issues may prevent them from innovating. With moral hazard, poor understanding of the fate and transport of pollutants, and possible free riding, farmers may face liability issues that are not due to their own efforts. In this case, they may prefer to forgo investments and not innovate. Furthermore, they may decide to shift liability costs to the regulator by demanding that the regulator specify design standards.
520 $a A model is developed to examine total maximum daily loads, authorized under the Clean Water Act to control nonpoint sources of pollution. This analysis of total maximum daily loads, which can be implemented by flexible performance standards, reveals that transaction costs due to compliance uncertainty affect the effort level of farmers, their costs, and their benefits from induced innovation. This analysis finds that under certain conditions, as the compliance uncertainty increases, two things occur: the amount of farmer effort expended is greater, and the cost to the farmer increases. Under certain conditions, cost savings from induced innovations are secondary to the cost-savings from decreased compliance uncertainty.
520 $a Once assumptions with respect to compliance uncertainty, expected penalties, and farmer liability that are taken for granted---implicitly or explicitly---in the customary examination of flexible performance standards are relaxed, and relevant transaction costs are included in the analysis, flexible performance standards may not be more cost-effective than design standards.
590 $a School code: 0128.
650 4 $a Economics, Agricultural. $3 626648
650 4 $a Environmental Sciences. $3 676987
690 $a 0503
690 $a 0768
710 2 0 $a Michigan State University. $3 676168
773 0 $t Dissertation Abstracts International $g 65-04A.
790 1 0 $a Batie, Sandra S., $e advisor
790 $a 0128
791 $a Ph.D.
792 $a 2004
856 4 0 $u http://pqdd.sinica.edu.tw/twdaoapp/servlet/advanced?query=3129544