Harmonization of Environmental Regulations When Firms are Judgment Proof

In an environmental setting, we examine different forms of harmonization based on either strict liability or negligence assuming the firm is judgment proof. When there is competition in standard setting then negligence dominates strict liability if there is upward pressure on standards. This upward pressure on standards arises as jurisdictions attempt to raise negligence standards. The desire to raise standards is affected by the degree of judgment proofness.