Are cap-and-trade programs more environmentally effective than conventional regulation?
AbstractMarket-based instruments (MBI’s) are advocated because of their presumed lower economic cost in comparison with conventional regulatory instruments. The environmental effectiveness of the MBI is typically assumed to be the same as that of the conventional alternative (Crocker, 1966; Dales, 1968; Montgomery, 1972). Recent experience with cap-and-trade systems has confirmed the economic advantages of MBI’s (Ellerman et al., 2000; Carlson et al., 2000; Ellerman et al., 2003) and failed to find a degradation of environmental performance (Burtraw and Mansur, 1999; Swift, 2000). As a result, MBI’s, and especially cap-and-trade systems, have become widely accepted in the policy community. Recognizing this circumstance, opponents of the use of MBIs tend to attack the assumption that the environmental performance is equal (Clear the Air, 2002; Moore, 2002). Their argument is that, while the economic performance may be better, the environmental performance is worse, and that the increased environmental damages outweigh the savings in abatement cost.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research in its series Working Papers with number 0315.
Date of creation: Sep 2003
Date of revision:
Contact details of provider:
Postal: 77 Massachusetts Ave. (Building E40-279), Cambridge, MA 02139-4307
Phone: (617) 253-3551
Fax: (617) 253-9845
Web page: http://tisiphone.mit.edu/RePEc
More information through EDIRC
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sharmila Ganguly) The email address of this maintainer does not seem to be valid anymore. Please ask Sharmila Ganguly to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.