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Cost Heterogeneity and the Potential Savings from Market-Based Policies

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Author Info
Newell, Richard G
Stavins, Robert N

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Abstract

Policy makers and analysts are often faced with situations where it is unclear whether market-based instruments hold real promise of reducing costs, relative to conventional uniform standards. We develop analytic expressions that can be employed with modest amounts of information to estimate the potential cost savings associated with market-based policies, with an application to the environmental policy realm. These simple formulae can identify instruments that merit more detailed investigation. We illustrate the use of these results with an application to nitrogen oxides control by electric utilities in the United States. Copyright 2003 by Kluwer Academic Publishers

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Publisher Info
Article provided by Springer in its journal Journal of Regulatory Economics.

Volume (Year): 23 (2003)
Issue (Month): 1 (January)
Pages: 43-59
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Handle: RePEc:kap:regeco:v:23:y:2003:i:1:p:43-59

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
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    Other versions:
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Full references

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Sheila M. Olmstead & Robert N. Stavins, 2008. "Comparing Price and Non-price Approaches to Urban Water Conservation," Working Papers 2008.66, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  2. Stavins, Robert, 2003. "Market-Based Environmental Policies: What Can We Learn from U.S. Experience (and Related Research)?," Discussion Papers dp-03-43, Resources For the Future. [Downloadable!]
    Other versions:
  3. Coxhead, Ian & Demeke, Bayou, 2006. "Modeling Spatially Differentiated Environmental Policy in a Philippine Watershed: Tradeoffs between Environmental Protection and Poverty Reduction," 2006 Annual meeting, July 23-26, Long Beach, CA 21115, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  4. Yihsu Chen & Jos Sijm & Benjamin Hobbs & Wietze Lise, 2008. "Implications of CO2 emissions trading for short-run electricity market outcomes in northwest Europe," Journal of Regulatory Economics, Springer, vol. 34(3), pages 251-281, December. [Downloadable!] (restricted)
  5. Stavins, Robert, 2004. "Environmental Economics," Working Paper Series rwp04-051, Harvard University, John F. Kennedy School of Government. [Downloadable!]
    Other versions:
  6. Ando, Amy & Harrington, Winston & McConnell, Virginia D., 2007. "Fees in an Imperfect World: An Application to Motor Vehicle Emissions," Discussion Papers dp-07-34, Resources For the Future. [Downloadable!]
  7. Feng, Hongli & Jha, Manoj & Gassman, Philip W., 2006. "The Allocation of Nutrient Load Reduction across a Watershed: Assessing Delivery Coefficients as an Implementation Tool," Staff General Research Papers 12554, Iowa State University, Department of Economics. [Downloadable!]
  8. Feng, Hongli & Jha, Manoj & Gassman, Phil, 2006. "Allocating Nutrient Load Reduction across a Watershed: Implications of Different Principles," 2006 Annual meeting, July 23-26, Long Beach, CA 21131, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  9. Yihsu Chen & Benjamin Hobbs & Sven Leyffer & Todd Munson, 2006. "Leader-Follower Equilibria for Electric Power and NO x Allowances Markets," Computational Management Science, Springer, vol. 3(4), pages 307-330, September. [Downloadable!] (restricted)
  10. Don Fullerton & Andrew Leicester & Stephen Smith, 2008. "Environmental Taxes," NBER Working Papers 14197, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Erin T. Mansur & Sheila M. Olmstead, 2007. "The Value of Scarce Water: Measuring the Inefficiency of Municipal Regulations," NBER Working Papers 13513, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Stavins, Robert, 2007. "Addressing Climate Change with a Comprehensive U.S. Cap-and-Trade System," Working Paper Series rwp07-053, Harvard University, John F. Kennedy School of Government. [Downloadable!]
    Other versions:
  13. Parry, Ian W.H. & Goulder, Lawrence H., 2008. "Instrument Choice in Environmental Policy," Discussion Papers dp-08-07, Resources For the Future. [Downloadable!]
    Other versions:
  14. Ye Feng & Don Fullerton & Li Gan, 2005. "Vehicle Choices, Miles Driven, and Pollution Policies," NBER Working Papers 11553, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Burtraw, Dallas & Sweeney, Richard & Walls, Margaret, 2008. "The Incidence of U.S. Climate Policy: Where You Stand Depends on Where You Sit," Discussion Papers dp-08-28, Resources For the Future. [Downloadable!]
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