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Pricing and regulating affect environmental ethics

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  • Bruno Frey

Abstract

Effluent charges and tradeable permits are economically efficient but rarely used. A new explanation for this discrepancy is offered. Pricing may crowd out environmental ethics in the pricing, and via spillovers, also in non-pricing sectors. Pricing may therefore increase pollution, providing a reason why decision-makers tend to reject environmental pricing. Five propositions showing the conditions for counterproductive effects are advanced. They are consistent with available empirical evidence. Regulation by setting standards and subsidies damage environmental ethics less than pricing, because pollution is condoned. Damaging environmental ethics may prevent political action in favor of the environment. Copyright Kluwer Academic Publishers 1992

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File URL: http://hdl.handle.net/10.1007/BF00304969
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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.

Volume (Year): 2 (1992)
Issue (Month): 4 (July)
Pages: 399-414

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Handle: RePEc:kap:enreec:v:2:y:1992:i:4:p:399-414

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Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: Effluent charges; environmental regulations; intrinsic motivation; ethics;

References

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  1. Hahn, Robert W, 1990. " The Political Economy of Environmental Regulation: Towards a Unifying Framework," Public Choice, Springer, vol. 65(1), pages 21-47, April.
  2. Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August.
  3. Wright, William F. & Aboul-Ezz, Mohamed E., 1988. "Effects of extrinsic incentives on the quality of frequency assessments," Organizational Behavior and Human Decision Processes, Elsevier, vol. 41(2), pages 143-152, April.
  4. Kenneth Arrow, 1970. "Political and Economic Evaluation of Social Effects and Externalities," NBER Chapters, in: The Analysis of Public Output, pages 1-30 National Bureau of Economic Research, Inc.
  5. Brennan, Geoffrey & Buchanan, James, 1983. "Predictive Power and the Choice among Regimes," Economic Journal, Royal Economic Society, vol. 93(369), pages 89-105, March.
  6. Frey, Bruno S. & Schneider, Friedrich & Pommerehne, Werner W., 1985. "Economists' opinions on environmental policy instruments: Analysis of a survey," Journal of Environmental Economics and Management, Elsevier, vol. 12(1), pages 62-71, March.
  7. Graetz, Michael J. & Reinganum, Jennifer F. & Wilde, Louis L., . "The Tax Compliance Game: Toward an Interactive Theory of Law Enforcement," Working Papers 589, California Institute of Technology, Division of the Humanities and Social Sciences.
  8. Hahn, Robert W, 1989. "Economic Prescriptions for Environmental Problems: How the Patient Followed the Doctor's Orders," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 95-114, Spring.
  9. Buchanan, James M & Tullock, Gordon, 1975. "Polluters' Profits and Political Response: Direct Controls Versus Taxes," American Economic Review, American Economic Association, vol. 65(1), pages 139-47, March.
  10. Plott, Charles R, 1983. "Externalities and Corrective Policies in Experimental Markets," Economic Journal, Royal Economic Society, vol. 93(369), pages 106-27, March.
  11. Henry, Claude, 1990. "Microeconomics and public decision making when geography matters," European Economic Review, Elsevier, vol. 34(2-3), pages 249-271, May.
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Citations

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Cited by:
  1. Heyes, Anthony, 2001. "Honesty in a regulatory context - good thing or bad?," European Economic Review, Elsevier, vol. 45(2), pages 215-232, February.
  2. Erik Gawel, 2001. "Intrinsische Motivation und umweltpolitische Instrumente," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 2(2), pages 145-165, 05.
  3. Bazin, Damien, 2009. "What exactly is corporate responsibility towards nature?: Ecological responsibility or management of nature?: A pluri-disciplinary standpoint," Ecological Economics, Elsevier, vol. 68(3), pages 634-642, January.
  4. Bazin, D. & Ballet, J. & Touahri, D., 2004. "Environmental responsibility versus taxation," Ecological Economics, Elsevier, vol. 49(2), pages 129-134, June.
  5. Gerhard Wegner, 1998. "Environmental (De-) Regulation, Competition, and Policy Rules," Constitutional Political Economy, Springer, vol. 9(3), pages 213-234, September.
  6. Sverre Grepperud, 2007. "Environmental voluntary behaviour and crowding-out effects: regulation or laissez-faire?," European Journal of Law and Economics, Springer, vol. 23(2), pages 135-149, April.
  7. Nyborg, Karine & Rege, Mari, 2003. " Does Public Policy Crowd Out Private Contributions to Public Goods," Public Choice, Springer, vol. 115(3-4), pages 397-418, June.
  8. Mejía Cubillos, Javier, 2012. "Ética y Justicia. Reflexiones a partir de The Idea of Justice de Amartya Sen
    [Ethics and justice. Reflections on The Idea of ​​Justice by Amartya Sen]
    ," MPRA Paper 37458, University Library of Munich, Germany.

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