[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ags/rffdps/10592.html
   My bibliography  Save this paper

Banking on "Green Money": Are Environmental Financial Responsibility Rules Fulfilling Their Promise?

Author

Listed:
  • Boyd, James
Abstract
Financial responsibility rules are an increasingly common form of environmental regulation. Currently, the operators of landfills, underground petroleum storage tanks, offshore rigs, and oil tankers must demonstrate the existence of adequate levels of capital as a precondition to the legal operation of their businesses. Environmental financial responsibility ensures that firms possess the resources to compensate society for pollution costs created in the course of business operations. In addition to providing a source of funds for victim compensation and pollution remediation, financial responsibility is thought to motivate better decision-making, particularly regarding the management of long-term risks. This article describes both the promise of financial responsibility as a complement to conventional environmental regulation and a set of weaknesses associated with its current implementation under U.S. environmental statutes.

Suggested Citation

  • Boyd, James, 1996. "Banking on "Green Money": Are Environmental Financial Responsibility Rules Fulfilling Their Promise?," Discussion Papers 10592, Resources for the Future.
    • Handle: RePEc:ags:rffdps:10592
    DOI: 10.22004/ag.econ.10592
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/10592/files/dp960026.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.10592?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Cohen, Mark A, 1987. "Optimal Enforcement Strategy to Prevent Oil Spills: An Application of a Principal-Agent Model with Moral Hazard," Journal of Law and Economics, University of Chicago Press, vol. 30(1), pages 23-51, April.
    2. Polinsky, A Mitchell & Shavell, Steven, 1991. "A Note on Optimal Fines When Wealth Varies among Individuals," American Economic Review, American Economic Association, vol. 81(3), pages 618-621, June.
    3. Steven Shavell, 1984. "A Model of the Optimal Use of Liability and Safety Regulation," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 271-280, Summer.
    4. Boyd, James & Ingberman, Daniel E, 1997. "The Search for Deep Pockets: Is "Extended Liability" Expensive Liability?," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 13(1), pages 232-258, April.
    5. Kaplow, Louis & Shavell, Steven, 1996. "Accuracy in the Assessment of Damages," Journal of Law and Economics, University of Chicago Press, vol. 39(1), pages 191-210, April.
    6. Boyd, James & Ingberman, Daniel E, 1994. "Noncompensatory Damages and Potential Insolvency," The Journal of Legal Studies, University of Chicago Press, vol. 23(2), pages 895-910, June.
    7. Göran Skogh, 1991. "Insurance and the Institutional Economics of Financial Intermediation," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 16(1), pages 59-72, January.
    8. James Boyd & Daniel E Ingberman, 1996. "The “Polluter Pays Principle”: Should Liability be Extended When the Polluter Cannot Pay?," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 21(2), pages 182-203, April.
    9. Kornhauser, Lewis A & Revesz, Richard L, 1990. "Apportioning Damages among Potentially Insolvent Actors," The Journal of Legal Studies, University of Chicago Press, vol. 19(2), pages 617-651, June.
    10. Shavell, S., 1986. "The judgment proof problem," International Review of Law and Economics, Elsevier, vol. 6(1), pages 45-58, June.
    11. Ringleb, Al H & Wiggins, Steven N, 1990. "Liability and Large-Scale, Long-term Hazards," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 574-595, June.
    12. Boyd, James & Kunreuther, Howard, 1997. "Retroactive Liability or the Public Purse?," Journal of Regulatory Economics, Springer, vol. 11(1), pages 79-90, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Feess, Eberhard & Hege, Ulrich, 2003. "Safety monitoring, capital structure, and "financial responsibility"," International Review of Law and Economics, Elsevier, vol. 23(3), pages 323-339, September.
    2. Anna Alberini & David Austin, 2002. "Accidents Waiting to Happen: Liability Policy and Toxic Pollution Releases," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 729-741, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giuseppe Dari-Mattiacci & Gerrit De Geest, 2005. "Judgment Proofness under Four Different Precaution Technologies," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 161(1), pages 38-56, March.
    2. Yeon‐Koo Che & Kathryn E. Spier, 2008. "Strategic judgment proofing," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 926-948, December.
    3. Charreire, Maxime & Langlais, Eric, 2021. "Should environment be a concern for competition policy when firms face environmental liability?," International Review of Law and Economics, Elsevier, vol. 67(C).
    4. Serge Garcia & Julien Jacob & Eve-Angéline Lambert, 2021. "Efficiency of sharing liability rules: An experimental case," Working Papers of BETA 2021-07, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    5. Lewis, Tracy R. & Sappington, David E. M., 1999. "Using decoupling and deep pockets to mitigate judgment-proof problems1," International Review of Law and Economics, Elsevier, vol. 19(2), pages 275-293, June.
    6. Guiseppe Dari Mattiaci & F. Parisi, 2003. "The Economics of Tort Law: A Précis," Working Papers 03-13, Utrecht School of Economics.
    7. Mondello, Gérard, 2012. "La responsabilité environnementale des prêteurs : difficultés juridiques et ensemble des possibles," L'Actualité Economique, Société Canadienne de Science Economique, vol. 88(2), pages 257-278, Juin.
    8. Gérard Mondello, 2012. "Strict Liability, Capped Strict Liability, and Care Effort under Asymmetric Information," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 168(2), pages 232-251, June.
    9. Innes, Robert, 1999. "Optimal liability with stochastic harms, judgement-proof injurers, and asymmetric information1," International Review of Law and Economics, Elsevier, vol. 19(2), pages 181-203, June.
    10. van 't Veld, Klaas & Shogren, Jason F., 2012. "Environmental federalism and environmental liability," Journal of Environmental Economics and Management, Elsevier, vol. 63(1), pages 105-119.
    11. Boyer, Marcel & Porrini, Donatella, 2011. "The impact of court errors on liability sharing and safety regulation for environmental/industrial accidents," International Review of Law and Economics, Elsevier, vol. 31(1), pages 21-29, March.
    12. van 't Veld, Klaas, 2006. "Hazardous-industry restructuring to avoid liability for accidents," International Review of Law and Economics, Elsevier, vol. 26(3), pages 297-322, September.
    13. Michael Faure, 2009. "Environmental Liability," Chapters, in: Michael Faure (ed.), Tort Law and Economics, chapter 10, Edward Elgar Publishing.
    14. Julien Jacob & Sandrine Spaeter, 2016. "Large-Scale Risks and Technological Change: What About Limited Liability?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 18(1), pages 125-142, February.
    15. G.G.A. de Geest & G. Dari Mattiacci, 2005. "Soft Regulators, tough judges," Working Papers 05-06, Utrecht School of Economics.
    16. Schmitz, Patrick W., 2000. "On the joint use of liability and safety regulation," International Review of Law and Economics, Elsevier, vol. 20(3), pages 371-382, September.
    17. Feess, Eberhard & Hege, Ulrich, 2003. "Safety monitoring, capital structure, and "financial responsibility"," International Review of Law and Economics, Elsevier, vol. 23(3), pages 323-339, September.
    18. Walls, W.D. & Zheng, Xiaoli, 2021. "Environmental regulation and safety outcomes: Evidence from energy pipelines in Canada," Resource and Energy Economics, Elsevier, vol. 64(C).
    19. Donatella Porrini, 2005. "Environmental Policies Choice as an Issue of Informational Efficiency," Chapters, in: Jürgen G. Backhaus (ed.), The Elgar Companion to Law and Economics, Second Edition, chapter 23, Edward Elgar Publishing.
    20. Dietrich Earnhart, 1998. "Civil Litigation, Access to Government-Held Information, and Coordination of Public and Private Enforcement in the Czech Republic," European Journal of Law and Economics, Springer, vol. 6(2), pages 113-141, September.

    More about this item

    Keywords

    Environmental Economics and Policy;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:rffdps:10592. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/rffffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.