NDLI: Environmental risks, the judgment-proof problem and financial responsibility

Content Provider	Springer Nature Link
Author	Kambia Chopin, Bidénam
Copyright Year	2010
Abstract	This paper examines a setting in which a firm is liable to pay environmental damages caused by its activity but may not have sufficient wealth for repair of damages. In order to induce the full internalization of the environmental cost, the firm is required to demonstrate a financial guarantee from a solvent party that covers this cost. Since the firm and the guarantor are joint liable for the harm caused by the firm, it is in the interest of the guarantor to design the guarantee contract in order to induce the firm to take an adequate level of prevention. First, I show that financial responsibility regime may achieve the social optimum. Secondly, I identify a particular form of contract in the set of contracts which induce the socially optimal level of prevention. This contract is closed to an alternative risk transfer product referred to as the spread loss treaty.
Starting Page	77
Ending Page	87
Page Count	11
File Format	PDF
ISSN	09291261
Journal	European Journal of Law and Economics
Volume Number	30
Issue Number	2
e-ISSN	15729990
Language	English
Publisher	Springer US
Publisher Date	2010-01-09
Publisher Place	Boston
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Alternative risk transfer Environmental risk Financial responsibility Judgment-proof problem Moral hazard Commercial Law Public Finance & Economics European Integration Law and Economics
Content Type	Text
Resource Type	Article
Subject	Business and International Management Law Economics and Econometrics

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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