A Model of Endogenous Oil Spill Regulation
This paper presents a model of endogenous oil spill regulation where the severity of regulations is shown to be a function of the size of recent spills. The regulator chooses how much to regulate in order to maximize political capital when regulations are rigid downwards and the distribution of spil...
| Main Author: | |
|---|---|
| Other Authors: | |
| Format: | Text |
| Language: | English |
| Subjects: | |
| Online Access: | http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.48.2812 http://www2.bc.edu/~ogus/endoreg.ps.gz |
| Summary: | This paper presents a model of endogenous oil spill regulation where the severity of regulations is shown to be a function of the size of recent spills. The regulator chooses how much to regulate in order to maximize political capital when regulations are rigid downwards and the distribution of spills is not known with certainty. Very large spills are shown to cause large increases in the regulation level. In the event that an unlikely disastrous spill is realized, major regulatory reform may take place which would take the regulations to too high a level. 1 Introduction After the discovery of oil-saturated sands in Alaska's North Slope in January 1968, the oil companies, looking for a way to transport the oil, proposed a pipeline. Although Friends of the Earth and fishermen filed suit against the proposed pipeline, seven oil companies formed a consortium, namely Alyeska, and with intensive lobbying succeeded in clearing the way for the Trans-Alaska Pipeline and the tanker route on t. |
|---|