Growing state–federal conflicts in environmental policy: The role of market-based regulation
AbstractIn recent years, cases in which state governments chose to override federal environmental regulation with tighter regulations of their own have become increasingly common, even for pollutants that have substantial spillovers across states. This paper argues that this change arose at least in part because of a shift in the type of regulation used at the federal level, from command-and-control regulation toward more incentive-based regulation. Under an incentive-based federal regulation, a state imposing a tighter regulation will bear only part of the additional cost, and thus has more incentive to tighten regulation than it does under federal command-and-control. This difference helps to explain observed patterns of regulation. In addition, it has implications for the choice of regulatory instruments. For a pollutant that causes both local and spillover damage, a federal pollution tax is likely to yield a more efficient outcome than federal command-and-control policy or a federal system of tradable permits.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Public Economics.
Volume (Year): 96 (2012)
Issue (Month): 11 ()
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Web page: http://www.elsevier.com/locate/inca/505578
Environmental regulation; Federalism; Pollution taxes; Tradable permits;
Other versions of this item:
- Roberton C. Williams III, 2010. "Growing State-Federal Conflicts in Environmental Policy: The Role of Market-Based Regulation," NBER Working Papers 16184, National Bureau of Economic Research, Inc.
- Williams III, Roberton C., 2010. "Growing State-Federal Conflicts in Environmental Policy: The Role of Market-Based Regulation," Working paper 619, Regulation2point0.
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- D62 - Microeconomics - - Welfare Economics - - - Externalities
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