Lagged regulation of energy industries
In a variety of contexts regulatory agencies are legally obliged to use a cost-benefit rule (or some variant there of) to revise environmental standards to reflect improvements m pollution-control techniques, but have considerable discretion over the timing of such revision. How should the agency us...
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| Format: | Working paper |
| Language: | English |
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Oxford Institute for Energy Studies
1995
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| _version_ | 1826261850742849536 |
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| author | Heyes, A |
| author_facet | Heyes, A |
| author_sort | Heyes, A |
| collection | OXFORD |
| description | In a variety of contexts regulatory agencies are legally obliged to use a cost-benefit rule (or some variant there of) to revise environmental standards to reflect improvements m pollution-control techniques, but have considerable discretion over the timing of such revision. How should the agency use this discretion? In a simple model of standard-setting under endogenous technical change we show that an agency can use implementation lags strategically to effect the supply of new ‘clean’ technologies. Longer lags tend to encourage more intense R&D; effort by the regulated industry itself whilst discouraging parallel effort by external developers. Optimal implementation lags are characterized. The analysis calls into question the conventional view that ‘foot-dragging’ by agencies is necessarily evidence of incompetence and/or regulatory capture and will, in general, be an efficient strategic response by the executive agency to the need to manipulate dynamic incentives. |
| first_indexed | 2024-03-06T19:27:05Z |
| format | Working paper |
| id | oxford-uuid:1c236d67-ab0f-4b4a-8857-644f6d1ef5e6 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T19:27:05Z |
| publishDate | 1995 |
| publisher | Oxford Institute for Energy Studies |
| record_format | dspace |
| spelling | oxford-uuid:1c236d67-ab0f-4b4a-8857-644f6d1ef5e62022-03-26T11:04:00ZLagged regulation of energy industriesWorking paperhttp://purl.org/coar/resource_type/c_8042uuid:1c236d67-ab0f-4b4a-8857-644f6d1ef5e6EnglishOxford University Research Archive - ValetOxford Institute for Energy Studies1995Heyes, AIn a variety of contexts regulatory agencies are legally obliged to use a cost-benefit rule (or some variant there of) to revise environmental standards to reflect improvements m pollution-control techniques, but have considerable discretion over the timing of such revision. How should the agency use this discretion? In a simple model of standard-setting under endogenous technical change we show that an agency can use implementation lags strategically to effect the supply of new ‘clean’ technologies. Longer lags tend to encourage more intense R&D; effort by the regulated industry itself whilst discouraging parallel effort by external developers. Optimal implementation lags are characterized. The analysis calls into question the conventional view that ‘foot-dragging’ by agencies is necessarily evidence of incompetence and/or regulatory capture and will, in general, be an efficient strategic response by the executive agency to the need to manipulate dynamic incentives. |
| spellingShingle | Heyes, A Lagged regulation of energy industries |
| title | Lagged regulation of energy industries |
| title_full | Lagged regulation of energy industries |
| title_fullStr | Lagged regulation of energy industries |
| title_full_unstemmed | Lagged regulation of energy industries |
| title_short | Lagged regulation of energy industries |
| title_sort | lagged regulation of energy industries |
| work_keys_str_mv | AT heyesa laggedregulationofenergyindustries |