This chapter examines the tradeoffs of regulating upstream (e.g., coal, natural gas, and refined petroleum product producers) versus regulating downstream (e.g., direct sources of greenhouse gases (GHG)). In general, regulating at the source provides polluters with incentives to choose among...

In a market subject to environmental regulation, a firm's strategic behavior affects the production and emissions decisions of all firms. If firms are regulated by a Pigouvian tax, changing emissions will not affect the marginal cost of polluting. However, under a tradable permits system, the...

This paper examines the impact of fetal exposure to air pollution on 4th grade test scores in Santiago, Chile. We rely on comparisons across siblings which address concerns about locational sorting and all other time-invariant family characteristics that can lead to endogenous exposure to poor...

This paper makes three contributions to the literature on private provision of public goods. First, we identify limitations of the frequently used specification test that distinguishes between the standard models of pure and impure altruism based on the extent of crowding out. While the...

Policies to address environmental and natural resource management are often implemented at the group level. The defining feature of such policies is that penalties or rewards are based on group rather than individual performance, or rights are allocated to a group rather than to individuals....

We examine the interplay between environmental policy instrument choice (i.e., prices vs. quantities) and private provision of public goods, which in this context we denote "Coasean provision." Coasean provision captures private provision of environmental public goods due to consumer preferences...

We make four main contributions in this paper related to the theory and practice of benefit cost analysis (BCA). First, we show that most BCAs of policy interventions do not consider the welfare consequences in secondary markets, where goods or services can be complements or substitutes to those...

Tradable permit regulations have recently been implemented for climate change policy in many countries. One of the first mandatory markets was the EU Emission Trading System, whose first phase ran from 2005-07. Unlike taxes, permits expose firms to volatility in regulatory costs, but are...

Rather than allowing water prices to reflect scarcity rents during periods of drought-induced excess demand, policy makers have mandated command-and-control approaches, like the curtailment of certain uses, primarily outdoor watering. Using unique panel data on residential end-uses of water, we...

The intermittency of payment for many goods creates a disconnect between paying and consuming such that the marginal price is not always salient when consumption decisions are made. This paper derives optimal dynamic corrective taxes when there are externalities as well as internalities from...