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Should environment be a concern for competition policy when firms face environmental liability?
International Review of Law and Economics ( IF 1.216 ) Pub Date : 2021-05-03 , DOI: 10.1016/j.irle.2021.105990
Maxime CHARREIRE , Eric LANGLAIS

In the recent period, more and more voices have called for unconventional competition policies as a way to achieve higher environmental investments from firms. This paper shows that this objective may come into conflict with those of environmental liability laws. We introduce a basic oligopoly model where firms produce a joint and indivisible environmental harm as a by-product of their output. We first analyze the effects on the equilibrium of alternative designs in environmental liability law, secondly, we discuss the rationale for “non-conventional” competition policies, i.e. more concerned with public interest such as the preservation of environment (as well as human health and so on). We study firms decisions of care and output under various liability regimes (strict liability vs negligence) associated with alternative damages apportionment rules (per capita vs market share rule), and in some cases with damages multipliers. We find that basing an environmental liability law on the combination of strict liability, the per capita rule, and an “optimal” damages multiplier, is consistent with a conservative competition policy, focused on consumers surplus, since, weakening firms’ market power also increases aggregate expenditures in environment preservation and social welfare. In contrast, a shift to the market share rule, or to a negligence regime, may be consistent with a restriction of competition, since firms’ entry may instead lead to a decrease in aggregate environmental expenditures and losses of social welfare. Nevertheless the fine tuning of the policy requires specific information from a Competition Authority, which we discuss as well.



中文翻译:

当企业面临环境责任时,环境是否应成为竞争政策的关注点?

在最近一段时间,越来越多的声音呼吁采用非常规的竞争政策,作为从企业获得更多环境投资的一种方式。本文表明,这一目标可能与环境责任法的目标相抵触。我们引入了一种基本的寡头垄断模式,在这种模式下,企业作为产出的副产品会产生共同的和不可分割的环境损害。我们首先分析环境责任法中替代设计平衡的影响,其次,我们讨论“非常规”竞争政策的基本原理,即更加关注公共利益,例如环境保护(以及人类健康和社会福利)。很快)。我们研究了与其他损失分配规则(人均vs市场份额规则)相关的各种赔偿责任制度(严格赔偿责任与过失)下公司的照料和产出决策,在某些情况下还涉及赔偿乘数。我们发现,基于严格责任,人均规则和“最佳”损害赔偿乘数相结合的环境责任法,与针对消费者剩余的保守竞争政策是一致的,因为削弱企业的市场力量也会增加环境保护和社会福利方面的总支出。相反,转向市场份额规则或疏忽制度可能与竞争限制相一致,因为企业的进入可能反而会导致环境总支出的减少和社会福利的损失。

更新日期:2021-05-18
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