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Influences of transaction costs in environmental policy

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Author Info

  • Coggan, Anthea
  • Whitten, Stuart M.
  • Bennett, Jeff

Abstract

There is a growing literature reporting the extent of transaction costs for environmental policies. However understanding why transaction costs occur and why they are small or large is also important for efficient policy selection and evaluation. Following an analysis of the organisational economics literature and reports of the extent of transaction costs for a number of environmental policies, three key influences to transaction costs in environmental policies are identified. These are the following: 1) the characteristics of the transaction for the environmental good; 2) the nature of the transactors; and 3) the current institutional environment and arrangements. These affect transaction costs to the government and all other parties influenced by a policy. Transaction costs occur due to actions of information collection and policy design, policy enactment and establishment, implementation and contracting, administration and monitoring, and enforcement. An interrogation of transaction cost influences reveals that: 1) the influence varies between parties and is affected by the actions and interactions of and between all parties to a policy; 2) how transaction costs are experienced varies across time; and 3) who experiences transaction costs depends on the policy itself. Future policy selection and refinement will benefit from empirical analysis of the causes of transaction costs.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 69 (2010)
Issue (Month): 9 (July)
Pages: 1777-1784

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Handle: RePEc:eee:ecolec:v:69:y:2010:i:9:p:1777-1784

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Web page: http://www.elsevier.com/locate/ecolecon

Related research

Keywords: Transaction costs Environmental policy Influences;

References

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Citations

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Cited by:
  1. Pannell, David J. & Roberts, Anna M. & Park, Geoff & Alexander, Jennifer, 2013. "Improving environmental decisions: A transaction-costs story," Ecological Economics, Elsevier, vol. 88(C), pages 244-252.
  2. McCann, Laura, 2013. "Transaction costs and environmental policy design," Ecological Economics, Elsevier, vol. 88(C), pages 253-262.
  3. Pannell, David J. & Roberts, Anna M. & Park, Geoff & Alexander, Jennifer, 2012. "Improving environmental decisions: a transaction-costs story," Working Papers 125851, University of Western Australia, School of Agricultural and Resource Economics.
  4. Coggan, Anthea & Buitelaar, Edwin & Whitten, Stuart & Bennett, Jeff, 2013. "Factors that influence transaction costs in development offsets: Who bears what and why?," Ecological Economics, Elsevier, vol. 88(C), pages 222-231.
  5. Mundaca, Luis & Mansoz, Mathilde & Neij, Lena & Timilsina, Govinda R, 2013. "Transaction costs of low-carbon technologies and policies : the diverging literature," Policy Research Working Paper Series 6565, The World Bank.

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