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Essays on the implementation of environmental regulations in Canada Eckert, Heather

Abstract

This thesis examines two important issues concerning the implementation of environmental regulation, with an emphasis on Canada. The first essay presents an empirical examination of inspection and warnings used to enforce inventory regulation for petroleum storage sites in Manitoba. Between 1983 and 1998, Manitoba Environment responded to 97% of inventory violations with a warning. The typical model used to study the enforcement of environmental regulations provides no role for warnings to reduce noncompliance. I develop a two stage probit model based on state dependent enforcement. In the first stage, the probability of an inspection is estimated as a function of site characteristics and violation history. The probability of a violation is then estimated as a function of site characteristics, violation history, and the estimated inspection probability. I find that the probability of a violation is decreasing in the inspection probability, suggesting that inspections and warnings may be effective even if few prosecutions result. The second and third essays examine the possibility that the distribution of regulatory powers between federal and regional governments in countries such as Canada can provide a strategic advantage in international environmental negotiations. I develop a model in which two countries negotiate an agreement on the abatement of a global pollutant. Each country is a federation and its exogenous constitution determines whether the federal or regional governments have jurisdiction over negotiating and enforcing international agreements. The regional governments place less weight on the global benefits of abatement, and therefore display a relative aversion to abatement. The second essay shows that the domestic region's relative aversion to abatement can provide the country with a strategic advantage when the region holds regulatory powers if the region is sufficiently large and the foreign country's regulatory powers lay with either the federal government or a larger region. If equal sized regions hold regulatory powers, both countries are worse off relative to federal control in both countries. In the third essay I show hat the federal government can enjoy a similar strategic advantage when the region enforces agreements negotiated by the federal government.

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