Title: On the existence of the optimal fine for environmental crime
Authors: Rousseau, Sandra ×
Telle, K. #
Issue Date: 2010
Publisher: Butterworths
Series Title: International Review of Law and Economics vol:30 issue:4 pages:329-337
Abstract: Classical theory states that the optimal fine equals the damage caused by the crime divided by the probability
of detection. But does such an optimal fine exist?Wefocus on emissions from production, and, even
if we assume that the damage function is perfectly known, we still show that the optimal fine typically
does not exist. Non-existence occurs as the environmental damage function is non-linear in overall emissions,
meaning that there are interactions between emissions, the economy and the environment. We
argue that these interactions cannot be accurately reflected in the fine imposed by the regulator. Previous
literature on optimal fines does not recognize the non-existence of the applicable optimal fine, basically
since this literature uses discrete models where the damage caused by the crime is assumed constant. Our
result reduces the attractiveness of fines and might thus help explain enforcement agencies’ inclination
towards non-monetary enforcement instruments.
ISSN: 0144-8188
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Research Center of Energy, Transport and Environment, Leuven
× corresponding author
# (joint) last author

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