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...

There is growing impetus for a domestic U.S. climate policy that can provide meaningful reductions in emissions of CO2 and other greenhouse gases. I describe and analyze an up- stream, economy-wide CO2 cap-and-trade system which implements a gradual trajectory of emissions reductions (with...

This paper, prepared for The New Palgrave Dictionary of Economics and the Law, provides a summary of the theory and the reality of economic-incentive approaches to environmental regulation. The paper begins with a derivation of the necessary and sufficient condition for a policy instrument to be...

The fundamental question that needs to be addressed by public policy in the area of environmental protection as we move into the next century is, "what is the appropriate role of government?" This question emerges along three fundamental dimensions in relation to environmental protection, which...

Policy makers and analysts are often faced with situations where it is unclear whether market-based instruments hold real promise of reducing costs, relative to conventional uniform standards. We develop analytic expressions that can be employed with modest amounts of information to estimate the...

This paper reviews lessons from the two decades of experience in the United States with market-based instruments for environmental protection. Normative lessons are considered for design and implementation, for analysis of prospective and adopted systems, and for identification of new...

This paper draws on American experience with four categories of market-based instruments for environmental protection: charge systems; tradeable permits; market friction reduction; and government subsidy reduction. The paper examines normative and positive lessons that can be learned from these...

California is beginning the process of considering possible next steps for the State's climate policy beyond the 2020 emission target mandated in the Global Warming Solutions Act of 2006 (“AB 32”). As it proceeds along this path, it is very important for the State to consider the...

This chapter provides an economic perspective of environmental law and policy. We examine the ends of environmental policy, that is, the setting of goals and targets, beginning with normative issues, notably the Kaldor–Hicks criterion and the related method of assessment known as...