Market-based Approaches to Environmental Regulation
Economists argue that policymakers should take advantage of market principles in designing environmental regulations. Such market-based approaches – environmental taxes and cap-and-trade – use economic incentives to achieve environmental goals at lower costs. Market-based approaches have now become common due to near-unanimous advocacy by economists and early positive policy experiences. Despite this acceptance, policymakers have often merged market-based incentives onto existing non-market approaches resulting in a set of mixed policies whose economic properties are often difficult to unravel. Thus, even the most prominent market-based regulations contain many non-market elements. The authors review the economics literature on the rationale for and optimal design of environmental taxes and cap-and-trade systems. They then discuss the structure and economics of the major U.S. market-based policies.
Year of publication: |
2006
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Authors: | Gayer, Ted ; Horowitz, John K. |
Published in: |
Foundations and Trends(R) in Microeconomics. - now publishers. - Vol. 1.2006, 4, p. 201-326
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Publisher: |
now publishers |
Saved in:
Online Resource
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