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Incentive-Based Policy Design for Pollution Control and Biodiversity Conservation: A Review

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  • Frans P. Vries

    (University of Stirling Management School)

  • Nick Hanley

    (University of St. Andrews)

Abstract

This paper provides a succinct review of the main developments in the literature on incentive-based policy mechanisms in the contexts of pollution control and biodiversity conservation, dating from the early beginnings of the science in the 1960s. A focal point in the review is on the design features of these policy mechanisms. Key developments in policy design were originally established in controlling externalities arising from pollution and have since been extended to policy design tailored towards biodiversity conservation. Special emphasis is given to the spatial characteristics of the environmental problems underlying both pollution control and biodiversity conservation. The paper concludes by drawing some lessons and setting out elements of a future research agenda in both policy domains.

Suggested Citation

  • Frans P. Vries & Nick Hanley, 2016. "Incentive-Based Policy Design for Pollution Control and Biodiversity Conservation: A Review," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(4), pages 687-702, April.
  • Handle: RePEc:kap:enreec:v:63:y:2016:i:4:d:10.1007_s10640-015-9996-8
    DOI: 10.1007/s10640-015-9996-8
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    More about this item

    Keywords

    Environmental policy instruments; Environmental markets; Mechanism design; Spatial coordination; Conservation auctions;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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