Environmental Economics

Noncompliance Penalties Instruction Manual

This manual describes the procedures used to calculate the noncompliance penalty imposed by the 1977 amendments to the Clean Air Act. The penalty removes the economic benefits which accrue to a firm from delaying investment in pollution control.
The method used to calculate the noncompliance penalty is based on the concept of economic savings. The savings realized by delaying the installation of pollution control equipment has two components. First, the firm benefits by delaying the capital expenditure needed for pollution control equipment. For this component, the economic savings equal the return the firm expects on the money that should have been invested in pollution control equipment. The second saving from noncompliance results from the absence of operating and maintenance expenses for the equipment. In this case, the economic benefits equal the value of all operating and maintenance expenses avoided by not being in compliance.

  • 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:
    Empirical Application, Methodology Development & Evaluation
    Report Series:
    Noncompliance Penalties
    Inventory Record #: EE-0109B
    List of all reports in the Series:
  • Participating Organizations

    Research Organization:

    Putnam, Hayes and Bartlett, Inc.Address:
    City: State: ZIP:
    Phone: Fax:
    E-mail:
    Funding Organization:
    Environmental Protection Agency, Economic Analysis DivisionAddress:
    City: State: ZIP:
    Phone: Fax:
    E-mail:
  • Report Details
    Type:
    Draft
    Date:
    09/29/1978
    Number of Pages:
    66
    Comment:
    Grant/Contract #:
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    Date Linked: 08/25/2017