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

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Author Info

  • 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. Coggan, Anthea & Whitten, Stuart M. & Bennett, Jeff, 2010. "Influences of transaction costs in environmental policy," Ecological Economics, Elsevier, vol. 69(9), pages 1777-1784, July.
  2. Evy Mettepenningen & Ann Verspecht & Guido Van Huylenbroeck, 2009. "Measuring private transaction costs of European agri-environmental schemes," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 52(5), pages 649-667.
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  4. McCann, Laura, 2013. "Transaction costs and environmental policy design," Ecological Economics, Elsevier, vol. 88(C), pages 253-262.
  5. Per Kristian Rørstad & Arild Vatn & Valborg Kvakkestad, 2007. "Why do transaction costs of agricultural policies vary?," Agricultural Economics, International Association of Agricultural Economists, vol. 36(1), pages 1-11, 01.
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  8. Ning Wang, 2007. "Measuring Transaction Costs: Diverging Approaches, Contending Practices," Division of Labor & Transaction Costs (DLTC), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 111-146.
  9. McCann, Laura & Colby, Bonnie & Easter, K. William & Kasterine, Alexander & Kuperan, K.V., 2005. "Transaction cost measurement for evaluating environmental policies," Ecological Economics, Elsevier, vol. 52(4), pages 527-542, March.
  10. 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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  13. Marshall, Graham R., 2013. "Transaction costs, collective action and adaptation in managing complex social–ecological systems," Ecological Economics, Elsevier, vol. 88(C), pages 185-194.
  14. Arild Vatn, 2001. "Environmental resources, property regimes, and efficiency," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 19(5), pages 665-680, October.
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  16. 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.
  17. Williamson, Oliver E, 1999. "Public and Private Bureaucracies: A Transaction Cost Economics Perspective," Journal of Law, Economics and Organization, Oxford University Press, vol. 15(1), pages 306-42, April.
  18. Vatn, Arild, 2010. "An institutional analysis of payments for environmental services," Ecological Economics, Elsevier, vol. 69(6), pages 1245-1252, April.
  19. Williamson, Oliver E, 1973. "Markets and Hierarchies: Some Elementary Considerations," American Economic Review, American Economic Association, vol. 63(2), pages 316-25, May.
  20. McCann, Laura M.J. & Easter, K. William, 2000. "Estimates Of Public Sector Transaction Costs In Nrcs Programs," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(03), December.
  21. Arild Vatn, 1998. "Input versus Emission Taxes: Environmental Taxes in a Mass Balance and Transaction Costs Perspective," Land Economics, University of Wisconsin Press, vol. 74(4), pages 514-525.
  22. Masten, Scott E & Meehan, James W, Jr & Snyder, Edward A, 1991. "The Costs of Organization," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(1), pages 1-25, Spring.
  23. Mettepenningen, E. & Beckmann, V. & Eggers, J., 2011. "Public transaction costs of agri-environmental schemes and their determinants--Analysing stakeholders' involvement and perceptions," Ecological Economics, Elsevier, vol. 70(4), pages 641-650, February.
  24. 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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Citations

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Cited by:
  1. McCann, Laura, 2013. "Transaction costs and environmental policy design," Ecological Economics, Elsevier, vol. 88(C), pages 253-262.
  2. 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.
  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. 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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