Moving to markets in environmental regulation.

Project Abstract

This research project explores the shift towards market-based mechanisms in environmental regulation. Traditional command-and-control approaches have limitations in addressing complex environmental challenges, leading policymakers to consider market-oriented solutions such as emissions trading, pollution taxes, and environmental offsets. The effectiveness of market-based instruments in achieving environmental goals is a subject of ongoing debate. This study aims to analyze the key drivers behind the move towards market-based environmental regulation, the challenges and opportunities associated with this shift, and the implications for environmental policy and practice. By examining case studies from different countries and sectors, the research seeks to provide insights into the design, implementation, and outcomes of market-based approaches in environmental governance. The findings of this study can inform policymakers, businesses, and other stakeholders on the potential benefits and drawbacks of transitioning to market mechanisms in environmental regulation, contributing to more informed decision-making and improved environmental outcomes.

Project Overview

<p> </p><p><strong>INTRODUCTION</strong></p><p>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.</p><p>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 <em>know</em>? 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.</p><p>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 . . .</p> <br><p></p>