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Factors that influence transaction costs in development offsets: Who bears what and why?

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  • Coggan, Anthea
  • Buitelaar, Edwin
  • Whitten, Stuart
  • Bennett, Jeff

Abstract

Environmental policy instruments generate transaction costs to public and private parties. There is a growing literature reporting on the size of transaction costs produced by environmental policy instruments. This paper extends that literature through an analysis of the factors that influence transaction costs in environmental policy and how this influence occurs. The theory based factors that influence transaction costs are categorised as: 1) transaction characteristics; 2) transactor characteristics; 3) nature of the institutional environment; and 4) nature of the institutional arrangements. We examined how these factors influenced transaction costs through the analysis of two Australian-based development offset schemes with different policy designs. We found evidence of all four theory-based categories of influence in the policy case studies. The degree of influence and how each factor influenced transaction costs varies across the two policies and between parties. Policy design as a component of the institutional environment had a particularly large bearing on transaction costs of offset buyers and the policy administrator. An important contribution to transaction cost theory assumes the institutional environment as given.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 88 (2013)
Issue (Month): C ()
Pages: 222-231

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Handle: RePEc:eee:ecolec:v:88:y:2013:i:c:p:222-231

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

Related research

Keywords: Transaction costs; Influencing factors; Environmental policy; Development offsets;

References

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  1. Douglass C. North, 1990. "A Transaction Cost Theory of Politics," Journal of Theoretical Politics, , vol. 2(4), pages 355-367, October.
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  4. Garrick, Dustin & Whitten, Stuart M. & Coggan, Anthea, 2013. "Understanding the evolution and performance of water markets and allocation policy: A transaction costs analysis framework," Ecological Economics, Elsevier, vol. 88(C), pages 195-205.
  5. Ofei-Mensah, Albert & Bennett, Jeff, 2013. "Transaction costs of alternative greenhouse gas policies in the Australian transport energy sector," Ecological Economics, Elsevier, vol. 88(C), pages 214-221.
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  26. McCann, Laura, 2013. "Transaction costs and environmental policy design," Ecological Economics, Elsevier, vol. 88(C), pages 253-262.
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Cited by:
  1. Ofei-Mensah, Albert & Bennett, Jeff, 2013. "Transaction costs of alternative greenhouse gas policies in the Australian transport energy sector," Ecological Economics, Elsevier, vol. 88(C), pages 214-221.
  2. McCann, Laura, 2013. "Transaction costs and environmental policy design," Ecological Economics, Elsevier, vol. 88(C), pages 253-262.
  3. Cacho, Oscar J. & Lipper, Leslie & Moss, Jonathan, 2013. "Transaction costs of carbon offset projects: A comparative study," Ecological Economics, Elsevier, vol. 88(C), pages 232-243.
  4. Garrick, Dustin & Whitten, Stuart M. & Coggan, Anthea, 2013. "Understanding the evolution and performance of water markets and allocation policy: A transaction costs analysis framework," Ecological Economics, Elsevier, vol. 88(C), pages 195-205.

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