Environmental Economics

Noncompliance Penalties Technical Support Document

This document describes the economic basis and mathematical formulation of a noncompliance penalty to be used in conforming with Section 120 of the 1977 Clean Air Act Amendments. The law requires EPA to impose compliance penalties on firms that delay the commitment of funds for air pollution control because it is more profitable to do so. The paper serves three purposes. Specifically, it presents in broad conceptual term the nature of economic savings that accrue to a firm through delayed compliance and the calculation of a penalty to remove the incentive to obtain those savings. It also provides a precise mathematical formulation of the noncompliance penalty and the assumptions used in deriving it. Finally, it provides a complete specification of the sources of all the data needed to calculate the penalty for a particular incidence of noncompliance.

  • Keywords

    Subject:
    4. Economic Incentives and Other Innovative Approaches
    8. Other Analyses and Reports
    4. Economic Incentives and Other Innovative Approaches - Liability
    Environmental Media:
    a. Air
    Authors:
    EPA Project Officer/ Manager:
    Geographic Area:
    Study Purpose:
    Methodology Guidelines
    Report Series:
    Noncompliance Penalties
    Inventory Record #: EE-0109A
    List of all reports in the Series:
  • Participating Organizations

    Research Organization:

    Putnam, Hayes and Bartlett, Inc.Address: One Newton Executive Park
    City: Newton State: MA ZIP: 02162
    Phone: Fax:
    E-mail:
    Funding Organization:
    Environmental Protection Agency,
    Economic Analysis Division
    Address:
    City: Washington State: DC ZIP: 20460
    Phone: Fax:
    E-mail:
  • Report Details
    Type:
    Final
    Date:
    02/09/1979
    Number of Pages:
    91
    Comment:
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    Date Linked: 08/25/2017