Economic Ideas for a Complex Climate Policy Regime
AbstractThe parsimony of economic theory provides general insights into an otherwise complex world. However, the most straightforward organizing principles from theory have not often taken hold in environmental policy or in the decentralized climate policy regime that is unfolding. One reason is inadequate recognition of a variety of institutions. This paper addresses three ways the standard model may inadequately anticipate the role of institutions in the actual implementation of climate policy, with a US focus: multilayered authority across jurisdictions, the impressionistic rather than deterministic influence of prices through subsidiary jurisdictions, and the complementary role of prices and regulation in this context. The economic approach is built on the premise that incentives affect behavior. We suggest an important pathway of influence for economic theory is to infuse incentive-based thinking into the conventional regulatory framework. In a complex policy regime, incentives can be shaped by shadow prices as well as market prices.
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 Resources For the Future in its series Discussion Papers with number dp-13-03-rev.
Date of creation: 08 Mar 2013
Date of revision:
institutions; federalism; subsidiarity; shadow prices; incentives; regulation;
Find related papers by JEL classification:
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-07-05 (Agricultural Economics)
- NEP-ALL-2013-07-05 (All new papers)
- NEP-ENE-2013-07-05 (Energy Economics)
- NEP-ENV-2013-07-05 (Environmental Economics)
- NEP-RES-2013-07-05 (Resource Economics)
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.:
- Cameron Hepburn, 2010.
"Environmental policy, government, and the market,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 26(4), pages 734-734, Winter.
- Pablo del Río & Xavier Labandeira, 2008. "Barriers to the introduction of market-based instruments in climate policies: an integrated theoretical framework," Working Papers 0805, Universidade de Vigo, Departamento de Economía Aplicada.
- Nicholas Z. Muller & Robert Mendelsohn, 2009. "Efficient Pollution Regulation: Getting the Prices Right," American Economic Review, American Economic Association, vol. 99(5), pages 1714-39, December.
- William M. Shobe & Dallas Burtraw, 2012.
"Rethinking Environmental Federalism In A Warming World,"
Climate Change Economics (CCE),
World Scientific Publishing Co. Pte. Ltd., vol. 3(04), pages 1250018-1-1.
- Shobe, William M. & Burtraw, Dallas, 2012. "Rethinking Environmental Federalism in a Warming World," Discussion Papers dp-12-04, Resources For the Future.
- William Shobe & Dallas Burtraw, 2012. "Rethinking Environmental Federalism in a Warming World," Working Papers 2012-01, Center for Economic and Policy Studies.
- Salant, Stephen W & Henderson, Dale W, 1978. "Market Anticipations of Government Policies and the Price of Gold," Journal of Political Economy, University of Chicago Press, vol. 86(4), pages 627-48, August.
- Burtraw, Dallas & Fraas, Arthur G. & Richardson, Nathan, 2011. "Greenhouse Gas Regulation under the Clean Air Act: A Guide for Economists," Discussion Papers dp-11-08, Resources For the Future.
- Pearce, David, 2006. "The political economy of an energy tax: The United Kingdom's Climate Change Levy," Energy Economics, Elsevier, vol. 28(2), pages 149-158, March.
- Nelson, Randy A & Tietenberg, Tom & Donihue, Michael R, 1993. "Differential Environmental Regulation: Effects on Electric Utility Capital Turnover and Emissions," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 368-73, May.
- Jonathan Levine & Aseem Inam, 2004. "The Market for Transportation-Land Use Integration: Do Developers Want Smarter Growth than Regulations Allow?," Transportation, Springer, vol. 31(4), pages 409-427, November.
- Dallas Burtraw & Art Fraas & Nathan Richardson, 2011. "Policy Monitor--Greenhouse Gas Regulation under the Clean Air Act: A Guide for Economists," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(2), pages 293-313, Summer.
- Burtraw, Dallas & Palmer, Karen & Kahn, Danny, 2009.
"A Symmetric Safety Valve,"
dp-09-06, Resources For the Future.
- Gruenspecht, Howard K, 1982. "Differentiated Regulation: The Case of Auto Emissions Standards," American Economic Review, American Economic Association, vol. 72(2), pages 328-31, May.
- Williams III, Roberton C., 2010.
"Growing State-Federal Conflicts in Environmental Policy: The Role of Market-Based Regulation,"
- Williams, Roberton C., 2012. "Growing state–federal conflicts in environmental policy: The role of market-based regulation," Journal of Public Economics, Elsevier, vol. 96(11), pages 1092-1099.
- 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.
- Kerr, Suzi & Newell, Richard, 2001.
"Policy-Induced Technology Adoption: Evidence from the U.S. Lead Phasedown,"
dp-01-14, Resources For the Future.
- Suzi Kerr & Richard G. Newell, 2003. "Policy-Induced Technology Adoption: Evidence from the U.S. Lead Phasedown," Journal of Industrial Economics, Wiley Blackwell, vol. 51(3), pages 317-343, 09.
- Dallas Burtraw & William Shobe, 2008. "State and Local Climate Policy under a National Emissions Floor," Working Papers 2008-05, Center for Economic and Policy Studies.
- Burtraw, Dallas & Palmer, Karen & Banzhaf, H. Spencer, 2002.
"Efficient Emission Fees in the U.S. Electricity Sector,"
dp-02-45, Resources For the Future.
- Spencer Banzhaf, H. & Burtraw, Dallas & Palmer, Karen, 2004. "Efficient emission fees in the US electricity sector," Resource and Energy Economics, Elsevier, vol. 26(3), pages 317-341, September.
- Maloney, Michael T & Brady, Gordon L, 1988. "Capital Turnover and Marketable Pollution Rights," Journal of Law and Economics, University of Chicago Press, vol. 31(1), pages 203-26, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster).
If references are entirely missing, you can add them using this form.