Chapter 10. Experimental Evaluations of Policy Instruments

Experimental methods have recently been used to evaluate environmental policy instruments, in particular – and most suitably, it seems – emissions trading programs of various designs. Some studies have focused on domestic emissions trading programs, while others have focused on international programs, in particular ones related to greenhouse gases. Much emphasis has been put on investigating the implications of market power in emissions trading. Other topics of the experimental studies reviewed here include the relative merits of different policy instruments (permits, taxes, standards), and the possibility of eliminating the need for conventional environmental policy through application of the Coase theorem.