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Environmental and Resource Economics

, Volume 62, Issue 1, pp 59–82 | Cite as

A Model of Benchmarking Regulation: Revisiting the Efficiency of Environmental Standards

  • Joschka Gerigk
  • Ian A. MacKenzie
  • Markus Ohndorf
Article

Abstract

The conventional economic argument favors the use of market-based instruments over ‘command-and-control’ regulation. This viewpoint, however, is often limited in the description and characteristics of the latter; namely, environmental standards are often portrayed as lacking structured abatement incentives. Yet contemporary forms of command-and-control regulation, such as standards stipulated via benchmarking, have the potential to be efficient. We provide a first formal analysis of environmental standards based on performance benchmarks. We show that under specific conditions, standards can provide efficient incentives to improve environmental performance.

Keywords

Environmental standards Command-and-control regulation Benchmarking Relative performance mechanism Contests 

JEL Classification

L51 Q50 Q58 

Notes

Acknowledgments

The authors are grateful to two anonymous reviewers and the Editor Anthony Heyes for helpful comments and suggestions that significantly improved this paper. Furthermore, we would like to thank Alessio D’Amato, Johannes Manser, and Renate Schubert as well as seminar participants in Zürich (ETH), Paris (26th International Climate Policy Workshop), Toulouse (EAERE 2013), and Ascona (SURED 2014) for their valuable comments and suggestions. Financial support by the Swiss Academy of Humanities and Social Sciences (SAGW) is gratefully acknowledged. All errors and shortcomings are our own.

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Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  • Joschka Gerigk
    • 1
  • Ian A. MacKenzie
    • 2
  • Markus Ohndorf
    • 1
  1. 1.ETH ZürichZürichSwitzerland
  2. 2.The University of QueenslandBrisbaneAustralia

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