Some eighty years ago, economists first proposed the use of corrective taxes to internalize environmental and other externalities. Fifty years later, the portfolio of potential economic-incentive instruments was expanded to include quantity-based mechanisms--tradable permits. Thus,...

The organizers of an Aspen Institute conference have identified what they characterize as “the critical conundrum” — how business, government, and communications media balance the competing values of economic growth and a healthy environment. In this paper, prepared for discussion at the...

We use a hazard model to estimate the effect of environmental regulation on the diffusion of membrane cell production technology in the chlorine manufacturing industry. We estimate the effect of regulation on both the adoption of the membrane technology at existing plants and on the exit of...

This paper investigates a central issue in the climate change debate associated with the Kyoto Protocol: the likely performance of international greenhouse gas trading mechanisms. Virtually all design studies and many projections of the costs of meeting the Kyoto targets have assumed that an...

Market failures associated with environmental pollution interact with market failures associated with the innovation and diffusion of new technologies. These combined market failures provide a strong rationale for a portfolio of public policies that foster emissions reduction as well as the...

We examine what will be required if market-based environmental policy instruments are to become a major force in U.S. environmental policy. We define market-based instruments, and specify five categories: pollution charges; tradable permits; deposit refund systems; reducing market barriers; and...

Environmental policy discussions increasingly focus on issues related to technological change. This is partly because the environmental consequences of social activity are frequently affected by the rate and direction of technological change, and partly because environmental policy interventions...

This paper introduces a volume of collected papers on the political economy of environmental regulation: economic analyses of the processes through which political decisions regarding environmental regulation are made, principally in the institutional context found in the United States. Despite...

Economists have expended considerable effort to develop economically meaningful definitions of the somewhat elusive concept of “sustainability.” We relate such a definition of sustainability to well known concepts from neoclassical economics, in particular, potential Pareto improvements (in...

This chapter provides an economic perspective of environmental law and policy with regard to both normative and positive dimensions. It begins with an examination of the central problem in environmental regulation: the tendency of pollution generators in an unconstrained market economy to...