Discretionary Exemptions from Environmental Regulation: Flexibility for Good or for Ill

Environmental protection laws impose strict limits on harmful activities, yet many include provisions giving regulators the discretion to grant exemptions that relax the requirements on regulated parties. We develop a model of firm and regulator behavior to examine theoretically the use and consequences of discretionary exemptions in environmental regulation.

Working Paper (19-20) by Dietrich Earnhart, Sarah Jacobson, Yusuke Kuwayama, and Richard T. Woodward — Aug. 26, 2019