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Information asymmetry in voluntary environmental agreements : theory and evidence from UK climate change agreements
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Adetutu, Morakinyo O. and Stathopoulou, Eleni (2021) Information asymmetry in voluntary environmental agreements : theory and evidence from UK climate change agreements. Oxford Economic Papers, 73 (2). pp. 644-670. doi:10.1093/oep/gpaa018 ISSN 0030-7653.
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WRAP-Information-asymmetry-voluntary-environmental-evidence-climate-Adetutu-2020.pdf - Accepted Version - Requires a PDF viewer. Download (941Kb) | Preview |
Official URL: https://doi.org/10.1093/oep/gpaa018
Abstract
Voluntary environmental agreements (VEAs) are often plagued by adverse selection problems, because the regulator has imperfect information about firm-specific production technologies and abatement costs. We explore this issue using the UK climate change agreement (CCA) as a case study. First, we present a theoretical emulation of the programme. Second, we resolve the regulator’s asymmetric information problem by estimating unobserved energy efficiency (EE) using production theory. Third, we use microdata from three confidential manufacturing surveys to empirically test how limited information impacts resource allocation within the scheme. In line with the problem of limited information about firm production technologies, we find that firms with lower levels of EE receive higher CCA tax discounts. This finding holds over a range of robustness tests.
| Item Type: | Journal Article | ||||||||
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| Subjects: | G Geography. Anthropology. Recreation > GE Environmental Sciences | ||||||||
| Divisions: | Faculty of Arts > School for Cross-faculty Studies Faculty of Arts > School for Cross-faculty Studies > Global Sustainable Development |
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| Library of Congress Subject Headings (LCSH): | Pollution prevention, Climatic changes -- Law and legislation -- Great Britain, Environmental impact charges -- Great Britain, Environmental law -- Great Britain, Energy conservation, Energy policy -- Environmental aspects | ||||||||
| Journal or Publication Title: | Oxford Economic Papers | ||||||||
| Publisher: | Oxford University Press | ||||||||
| ISSN: | 0030-7653 | ||||||||
| Official Date: | April 2021 | ||||||||
| Dates: |
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| Volume: | 73 | ||||||||
| Number: | 2 | ||||||||
| Page Range: | pp. 644-670 | ||||||||
| DOI: | 10.1093/oep/gpaa018 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Reuse Statement (publisher, data, author rights): | This is a pre-copyedited, author-produced version of an article accepted for publication in Oxford Economic Papers following peer review. The version of record: Adetutu, Morakinyo O. and Stathopoulou, Eleni (2020) Information asymmetry in voluntary environmental agreements : theory and evidence from UK climate change agreements. Oxford Economic Papers. gpaa018. is available online at: https://doi.org/10.1093/oep/gpaa018 | ||||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||||
| Date of first compliant deposit: | 18 May 2020 | ||||||||
| Date of first compliant Open Access: | 13 June 2022 | ||||||||
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