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Influences of transaction costs in environmental policy

Author

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  • Coggan, Anthea
  • Whitten, Stuart M.
  • Bennett, Jeff

Abstract

There is a growing literature reporting the extent of transaction costs for environmental policies. However understanding why transaction costs occur and why they are small or large is also important for efficient policy selection and evaluation. Following an analysis of the organisational economics literature and reports of the extent of transaction costs for a number of environmental policies, three key influences to transaction costs in environmental policies are identified. These are the following: 1) the characteristics of the transaction for the environmental good; 2) the nature of the transactors; and 3) the current institutional environment and arrangements. These affect transaction costs to the government and all other parties influenced by a policy. Transaction costs occur due to actions of information collection and policy design, policy enactment and establishment, implementation and contracting, administration and monitoring, and enforcement. An interrogation of transaction cost influences reveals that: 1) the influence varies between parties and is affected by the actions and interactions of and between all parties to a policy; 2) how transaction costs are experienced varies across time; and 3) who experiences transaction costs depends on the policy itself. Future policy selection and refinement will benefit from empirical analysis of the causes of transaction costs.

Suggested Citation

  • Coggan, Anthea & Whitten, Stuart M. & Bennett, Jeff, 2010. "Influences of transaction costs in environmental policy," Ecological Economics, Elsevier, vol. 69(9), pages 1777-1784, July.
  • Handle: RePEc:eee:ecolec:v:69:y:2010:i:9:p:1777-1784
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    References listed on IDEAS

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    2. Pannell, David J. & Roberts, Anna M. & Park, Geoff & Alexander, Jennifer, 2013. "Improving environmental decisions: A transaction-costs story," Ecological Economics, Elsevier, vol. 88(C), pages 244-252.
    3. Coggan, Anthea & Buitelaar, Edwin & Whitten, Stuart & Bennett, Jeff, 2013. "Factors that influence transaction costs in development offsets: Who bears what and why?," Ecological Economics, Elsevier, vol. 88(C), pages 222-231.
    4. repec:eee:ecoser:v:15:y:2015:i:c:p:125-133 is not listed on IDEAS
    5. McCann, Laura, 2013. "Transaction costs and environmental policy design," Ecological Economics, Elsevier, vol. 88(C), pages 253-262.
    6. Cox, Michael & Mincey, Sarah & Ruseva, Tatyana & Villamayor-Tomas, Sergio & Fischer, Burney, 2013. "Evaluating the USFS State and Private Forestry Redesign: A first look at policy implications," Ecological Economics, Elsevier, vol. 85(C), pages 35-42.
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    9. Shteryo Nozharov, 2018. "Transaction Costs In Collective Waste Recovery Systems In The Eu," Economic Archive, D. A. Tsenov Academy of Economics, Svishtov, Bulgaria, issue 1 Year 20, pages 18-30.
    10. repec:eee:ecoser:v:17:y:2016:i:c:p:53-63 is not listed on IDEAS
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    15. DeBoe, Gwendolen & Stephenson, Kurt, 2016. "Transactions costs of expanding nutrient trading to agricultural working lands: A Virginia case study," Ecological Economics, Elsevier, vol. 130(C), pages 176-185.
    16. Nijiraini, Georgina & Thiam, Djiby, 2015. "Estimating transaction costs associated with water policy implementation in South Africa," 2015 Conference, August 9-14, 2015, Milan, Italy 212585, International Association of Agricultural Economists.
    17. Lai, Lawrence W.C. & Chau, K.W. & Lorne, Frank T., 2016. "The rise and fall of the sand monopoly in colonial Hong Kong," Ecological Economics, Elsevier, vol. 128(C), pages 106-116.
    18. Phan, Thu-Ha Dang & Brouwer, Roy & Davidson, Marc David, 2017. "A Global Survey and Review of the Determinants of Transaction Costs of Forestry Carbon Projects," Ecological Economics, Elsevier, vol. 133(C), pages 1-10.
    19. Górriz-Mifsud, Elena & Secco, Laura & Pisani, Elena, 2016. "Exploring the interlinkages between governance and social capital: A dynamic model for forestry," Forest Policy and Economics, Elsevier, vol. 65(C), pages 25-36.
    20. Janet Dwyer & John Powell, 2016. "Rural Development Programmes and Transaction Effects: Reflections on Maltese and English Experience," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(3), pages 545-565, September.
    21. Thiel, Andreas & Schleyer, Christian & Hinkel, Jochen & Schlüter, Maja & Hagedorn, Konrad & Bisaro, Sandy & Bobojonov, Ihtiyor & Hamidov, Ahmad, 2016. "Transferring Williamson's discriminating alignment to the analysis of environmental governance of social-ecological interdependence," Ecological Economics, Elsevier, vol. 128(C), pages 159-168.
    22. Eory, Vera, 2015. "Evaluating the use of marginal abatement cost curves applied to greenhouse gas abatement in agriculture," Working Papers 199777, Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group.
    23. Eory, Vera, 2015. "Evaluating the use of marginal abatement cost curves applied to greenhouse gas abatement in agriculture," Working Papers 199777, Scottish Agricultural College, Land Economy Research Group.

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