By Jody Freeman, Charles D. Kolstad
Over the past decade, market-based incentives became the regulatory instrument of selection whilst attempting to remedy tricky environmental difficulties. proof in their dominance could be visible in fresh proposals for addressing international warming (through an emissions buying and selling scheme within the Kyoto Protocol) and for amending the fresh Air Act (to upload a brand new emissions buying and selling structures for smog precursors and mercury--the Bush administration's "Clear Skies" program). they're greatly seen as extra effective than conventional command and keep watch over law. This selection of essays takes a serious examine this query, and evaluates no matter if the guarantees of market-based legislation were fulfilled.Contributors positioned forth the guidelines that few regulatory tools are literally in basic terms market-based, or in basic terms prescriptive, and that either ways will be systematically undermined by means of insufficiently cautious layout and by means of mess ups of tracking and enforcement. All in all, the essays suggest destiny study that now not pits one form of strategy opposed to the opposite, yet in its place examines their interplay and compatibility. This e-book should still attract lecturers in environmental economics and legislations, besides policymakers in govt organisations and advocates in non-governmental firms.
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Additional resources for Moving to Markets in Environmental Regulation: Lessons from Twenty Years of Experience
Furthermore, if command-and-control instruments take the form of technology standards or emission rate standards, they are likely to provide less certainly regarding the achievement of an aggregate emissions (or ambient concentration) target than a cap-and-trade program, because the former do not control for product output. 11. See Stavins (2000, 2002, 2003). 38 Moving to Markets in Environmental Regulation 12. In addition, the Energy Policy and Conservation Act of 1975 established Corporate Average Fuel Economy (CAFE) standards for automobiles and light trucks, requiring manufacturers to meet minimum sales-weighted average fuel efﬁciency for their ﬂeets sold in the United States.
General Accounting Ofﬁce 1992; Hamilton 1995; Bui and Mayer 1997; Konar and Cohen 1997; Ananathanarayanan 1998; and Hamilton and Viscusi 1999). Government Subsidy Reduction Government subsidy reduction is the fourth and ﬁnal category of marketbased instruments. 15 In practice, however, many subsidies promote economically inefﬁcient and environmentally unsound practices. Unfortunately, assessing the magnitude (let alone the effects), of these subsidies is difﬁcult. S. Energy Market-Based Environmental Policies 25 Information Administration 1999, 2000).
Most broadly, changes in relative prices— whether exogenous or policy-induced—can drive technological change and thereby differentially affect the performance of alternative policy instruments (Snyder et al. 2003). 18 Experiences with market-based instruments offer some guidance to the conditions under which such approaches are likely to work well and when they may face greater difﬁculties. First, where the cost of abating pollution differs widely among sources, a market-based system is likely to have greater gains, relative to conventional, command-and-control regulations (Newell and Stavins 2003).