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Why do some policies fail?
Weak institutions, political constraints, limited enforcement capacity
What are examples of alternative policies
Public disclosures and voluntary regulation
How effective are alternative policies
Public disclosures- majority of studies fail to find evidence that program reduced environmental performance. Voluntary agreements- majority of studies do not show environmental impact.
What influences firms choice of emissions?
Expected marginal penalty and marginal abatement costs. If MAC > EMP, it is cheaper for firms to pay penalties than to abate. If MAC < EMP, cheaper for firms to reduce emissions than pay penalties.