Thesis Abstract

Abstract
This research project delves into the concept of moving to markets in environmental regulation, examining the shift towards market-based instruments as a means to address environmental issues. The traditional command-and-control approach to environmental regulation has limitations, leading policymakers to consider alternative mechanisms such as emissions trading, pollution taxes, and cap-and-trade systems. By exploring the theoretical underpinnings and practical applications of market-based environmental regulation, this study aims to provide insights into the effectiveness and implications of such approaches. The research will begin by reviewing the existing literature on environmental regulation, focusing on the evolution of market-based instruments and their adoption in different contexts. It will analyze case studies of countries that have successfully implemented market-based approaches to environmental regulation, highlighting the factors that contributed to their success. Additionally, the study will assess the challenges and criticisms associated with moving to markets in environmental regulation, including issues related to monitoring, enforcement, and market manipulation. Furthermore, the project will investigate the economic and environmental outcomes of market-based environmental regulation compared to traditional regulatory approaches. By comparing the costs and benefits of different regulatory mechanisms, the research aims to determine the efficiency and effectiveness of market-based instruments in achieving environmental objectives. It will also examine the role of stakeholders, including government agencies, industry players, and environmental groups, in shaping the design and implementation of market-based regulations. In conclusion, this research project seeks to contribute to the ongoing discourse on environmental regulation by offering a comprehensive analysis of the shift towards market-based instruments. By examining the theoretical foundations, practical applications, and outcomes of moving to markets in environmental regulation, the study aims to inform policymakers, researchers, and stakeholders about the potential opportunities and challenges associated with market-based approaches. Ultimately, the findings of this research can help guide future decision-making processes regarding environmental policy and regulation, with the goal of fostering sustainable development and environmental protection.

Thesis Overview

INTRODUCTION

Over the last decade, market-based incentives have become the regulatory tool of choice when trying to solve difficult environmental problems. They are widely viewed as more efficient than traditional command and control regulation. This collection of essays takes a critical look at this question, evaluates whether the promises of market-based regulation have been fulfilled, and recommends future research that no longer pits one kind of approach against the other, but instead examines their interaction and compatibility.

This book had its genesis in conversations that took place over a period of months in 2002, conversations that were helped along by fine Santa Barbara County wine. Our topic was environmental regulation—in particular the long-standing debate over command and control versus market-based environmental regulation—and our discussions made us wonder: How could two scholars—one of us an economist, the other a lawyer—be so concerned about the same problem yet have such different perspectives? The literatures we drew on seemed to have little in common, and our normative frameworks seemed like ships passing in the night. Were we typical? In what ways did economists think about these regulatory design issues differently than legal scholars? Beyond the differences in approach, what did each field actually know? Now that we had some experience with market-based regulations, what did the experience tell us? In particular, if we could draw on the most interesting and recent work in both fields, what would it tell us about how well market instruments had performed, relative to prescriptive regulation, to date? To answer these questions, we invited some of the brightest minds concerned with environmental regulation, from both economics and law, to prepare papers and convene for a focused one-day workshop in Santa Barbara in August 2003. Our hope was that the whole emerging from such a dialogue would be much more than the sum of the two disciplinary parts.

The result was quite remarkable. Over the course of the very long day, the intensity never waned. The conversation was relentlessly interesting and truly cross-disciplinary. There were fascinating moments of translation and synergy, agreement and disagreement. The interchange frequently surprised the group and led to questions and issues we had not . . .