Pollution Liability Insurance and Catastrophic Environmental Risk

Katzman, Martin T.

doi:10.2307/253282

Cited by 78 publications

(26 citation statements)

References 30 publications

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“…For example, more complex control mechanisms and liabilities, the effects of insurance and risk sharing, the application of cooperative efforts and subvention of pollution abatement investments (through tax incentives and their like), etc. have not been considered [5,7]. These are topics for further research.…”

Section: Resultsmentioning

confidence: 99%

Environmental quality control and environmental games

Tapiero

2005

Environ Model Assess

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This paper is concerned with the problem of an environmental "regulator" and a potentially "polluting firm" who uses a pollution technology, expressed by the propensity to pollute. Pollution risks, measured by their consequences are, however, a function of the regulators detection of polluting events. An event which is not detected is costless to the firm but costly to "society" faced with cleaning the environment while a detected polluting event induces a cost borne by both the firm and "society"-costs assumed shared in some fashion. Using a game theory framework we determine an endogenous pollution probability and an environmental control policy. Issues regarding investment in preventive measures, environmental controls and the likes are then assessed. The problems that both the polluting firm and the regulator are faced with are then two-fold: (1) given a polluting technology and a shared penalty cost when a polluting event occurs, what are the control effort to exercise by the firm and what controls and preventive efforts should the firm apply and (2) what are the effects of the technology choice and penalty-cost sharing parameters on the firm and society's payoffs. These problems lead to a random payoffs environmental game which we solve by assuming first risk neutrality and subsequently by assuming a quadratic (risk aversion) utility function for both the polluting firm and the environmental regulator.

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Section: Resultsmentioning

confidence: 99%

Environmental quality control and environmental games

Tapiero

2005

Environ Model Assess

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“…Katzman (1988) notes the need for pollution liability insurance in response to the environmental catastrophes of the time. Tol (1998) recognizes early-on the effects of climate change and the need for climate insurance.…”

Section: Environmental Risk Managementmentioning

confidence: 99%

Training the next generation of disaster risk managers through sustainability research and teaching

Addas

Kibsey²,

Ng³

et al. 2016

AD-minister

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“…The insurers in both cities set a maximum limit for the underwritten value for pollution insurance, to lower the risk of having to pay huge compensation. In addition, the retroactive period was set to be 3 years among all insurers in both cities, which means that an insured company is covered for claims initiated during the contract period arising out of occurrences that took place in the three years before the effective date (Katzman, 1988). In general, because of the long term effects of environmental accidents (e.g.…”

Section: Pollution Insurance Markets In Chongqing and Wuximentioning

confidence: 99%

Environmental pollution liability insurance in China: compulsory or voluntary?

Feng

Mol

Lü

et al. 2014

Journal of Cleaner Production

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a b s t r a c tChina started the trial application of Environmental Pollution Liability Insurance in 2008, as part of a wider development of using market actors and market mechanisms in mitigating environmental pollution. Around the world and in China two main patterns of local pollution insurance practices can be identified: voluntary and compulsory pollution insurance promotion. In order to assess experiences from local pollution insurance practices in China and to contribute to the construction of a national pollution insurance policy in 2015, comparative case studies were carried out on voluntary (Chongqing) and compulsory (Wuxi, Jiangsu province) pollution insurance. Based on the analysis of pollution insurance products, differences in local policies, involved governance structures, and stakeholder attitudes, differences in pollution insurance market development between Chongqing and Wuxi are illustrated. The results show that in contemporary China, compulsory pollution insurance promotion helps local governments to quickly build a relatively mature system of pollution insurance. But it is too early to draw conclusions on the contribution of pollution insurance to environmental risk mitigation and pollution victim compensation.

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Pollution Liability Insurance and Catastrophic Environmental Risk

Cited by 78 publications

References 30 publications

Environmental quality control and environmental games

Environmental quality control and environmental games

Training the next generation of disaster risk managers through sustainability research and teaching

Environmental pollution liability insurance in China: compulsory or voluntary?

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