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Market-Based Solutions to Environmental Problems: Discussion

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  • Woodward, Richard T.

Abstract

There is rapidly growing interest in the use of market-based (MB) instruments in environmental policy. The papers in this session discuss three relatively new areas for such policies: groundwater contamination, nonpoint source surface-water pollution and carbon sequestration. The papers point out the potential for MB policies in these areas, but significant challenges remain. This comment highlights challenges related to five issues: monitoring and enforcement, trading ratios, baselines, transaction costs, and risk and uncertainty. All these issues must be addressed before MB policies can take the full step from economic theory to regulatory reality.

Suggested Citation

  • Woodward, Richard T., 2000. "Market-Based Solutions to Environmental Problems: Discussion," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 32(2), pages 259-266, August.
    • Handle: RePEc:cup:jagaec:v:32:y:2000:i:02:p:259-266_02
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    References listed on IDEAS

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    1. James Shortle & David Abler & Richard Horan, 1998. "Research Issues in Nonpoint Pollution Control," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 571-585, April.
    2. Bruce A. Babcock, 1992. "The Effects of Uncertainty on Optimal Nitrogen Applications," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 14(2), pages 271-280.
    3. Karen Palmer & Wallace E. Oates & Paul R. Portney & Karen Palmer & Wallace E. Oates & Paul R. Portney, 2004. "Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm?," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 3, pages 53-66, Edward Elgar Publishing.
    4. Montero, Juan-Pablo, 1998. "Marketable pollution permits with uncertainty and transaction costs," Resource and Energy Economics, Elsevier, vol. 20(1), pages 27-50, March.
    5. Atkinson, Scott & Tietenberg, Tom, 1991. "Market failure in incentive-based regulation: The case of emissions trading," Journal of Environmental Economics and Management, Elsevier, vol. 21(1), pages 17-31, July.
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    Cited by:

    1. Paragahawewa, Upananda H. & Doole, Graeme J. & Bower, Bob, 2015. "Is dilution the solution for water pollution? An economic analysis," 2015 Conference (59th), February 10-13, 2015, Rotorua, New Zealand 202984, Australian Agricultural and Resource Economics Society.

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    More about this item

    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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