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The Equity-Efficiency Trade-off in Environmental Policy: Evidence from Stated Preferences

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  • Simon Dietz
  • Giles Atkinson

Abstract

The design of environmental policy raises several equity issues, in particular the distribution of benefits and costs. At the same time, it has often been argued that there is a trade-off in environmental policy between equity and efficiency, which brings these issues firmly to the attention of environmental economics. In this paper we use a simple choice experiment to elicit individual preferences over equity-efficiency trade-offs in the context of two environmental problems, local air pollution and global climate change. We find that equity matters to people as much as efficiency does in the design and delivery of environmental policy.

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  • Simon Dietz & Giles Atkinson, 2010. "The Equity-Efficiency Trade-off in Environmental Policy: Evidence from Stated Preferences," Land Economics, University of Wisconsin Press, vol. 86(3).
    • Handle: RePEc:uwp:landec:v:86:y:2010:iii:1:p423-443
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    Cited by:

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    2. Fanghella, Valeria & Faure, Corinne & Guetlein, Marie-Charlotte & Schleich, Joachim, 2023. "What's in it for me? Self-interest and preferences for distribution of costs and benefits of energy efficiency policies," Ecological Economics, Elsevier, vol. 204(PA).
    3. Alberini, Anna & Ščasný, Milan & Bigano, Andrea, 2018. "Policy- v. individual heterogeneity in the benefits of climate change mitigation: Evidence from a stated-preference survey," Energy Policy, Elsevier, vol. 121(C), pages 565-575.
    4. Milan Ščasný & Iva Zvěřinová & Mikolaj Czajkowski & Eva Kyselá & Katarzyna Zagórska, 2017. "Public acceptability of climate change mitigation policies: a discrete choice experiment," Climate Policy, Taylor & Francis Journals, vol. 17(0), pages 111-130, June.
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    6. Faure, Corinne & Guetlein, Marie-Charlotte & Schleich, Joachim & Tu, Gengyang & Whitmarsh, Lorraine & Whittle, Colin, 2022. "Household acceptability of energy efficiency policies in the European Union: Policy characteristics trade-offs and the role of trust in government and environmental identity," Ecological Economics, Elsevier, vol. 192(C).
    7. Miqdad Asaria & Joan Costa-Font & Frank Cowell, 2023. "How does exposure to COVID-19 influence health and income inequality aversion?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 61(3), pages 625-647, October.
    8. Martin Stadelmann & Åsa Persson & Izabela Ratajczak-Juszko & Axel Michaelowa, 2014. "Equity and cost-effectiveness of multilateral adaptation finance: are they friends or foes?," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 14(2), pages 101-120, May.
    9. Elke D. Groh & Andreas Ziegler, 2017. "On self-interested preferences for burden sharing rules: An econometric analysis for the costs of energy policy measures," MAGKS Papers on Economics 201754, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    10. Ziegler, Andreas, 2019. "The Relevance of Attitudinal Factors for the Acceptance of Energy Policy Measures: A Micro-econometric Analysis," Ecological Economics, Elsevier, vol. 157(C), pages 129-140.
    11. Pan, Xunzhang & Teng, Fei & Wang, Gehua, 2014. "A comparison of carbon allocation schemes: On the equity-efficiency tradeoff," Energy, Elsevier, vol. 74(C), pages 222-229.
    12. Benjamin Ouvrard & Arnaud Reynaud & Stéphane Cezera & Alban Thomas & Dishant Jojit James & Murudaiah Shivamurthy, 2023. "Distributive Justice in the Field: How do Indian Farmers Share Water? ," Working Papers hal-04150233, HAL.
    13. Fang, Ximeng & Innocenti, Stefania, 2023. "Increasing the acceptability of carbon taxation: The role of social norms and economic reasoning," INET Oxford Working Papers 2023-25, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    14. Brady, Michael P. & Chouinard, Hayley H. & Wandschneider, Philip R., 2017. "Me, the Poor or the Environment: Evaluating the Relative Strength of Social and Environmental Preferences," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258548, Agricultural and Applied Economics Association.
    15. Charles Van-Hein Sackey & Destenie Nock & Christine Cao & Daniel Armanios & Alex Davis, 2023. "Incorporating Elicited Preferences for Equality into Electricity System Planning Modeling," Sustainability, MDPI, vol. 15(23), pages 1-21, November.
    16. Moritz A. Drupp & Ulrike Kornek & Jasper N. Meya & Lutz Sager, 2021. "Inequality and the Environment: The Economics of a Two-Headed Hydra," CESifo Working Paper Series 9447, CESifo.
    17. Laura Bojke & Laetitia Schmitt & James Lomas & Gerry Richardson & Helen Weatherly, 2018. "Economic Evaluation of Environmental Interventions: Reflections on Methodological Challenges and Developments," IJERPH, MDPI, vol. 15(11), pages 1-9, November.
    18. Kanberger, Elke D. & Ziegler, Andreas, 2023. "On the preferences for an environmentally friendly and fair energy transition: A stated choice experiment for Germany," Energy Policy, Elsevier, vol. 182(C).
    19. Sommer, Stephan & Mattauch, Linus & Pahle, Michael, 2022. "Supporting carbon taxes: The role of fairness," Ecological Economics, Elsevier, vol. 195(C).
    20. Andreas Ziegler, 2017. "Economic calculus or personal and social values? A micro-econometric analysis of the acceptance of climate and energy policy measures," MAGKS Papers on Economics 201716, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    21. Groh, Elke D. & Ziegler, Andreas, 2018. "On self-interested preferences for burden sharing rules: An econometric analysis for the costs of energy policy measures," Energy Economics, Elsevier, vol. 74(C), pages 417-426.
    22. Kruse, Tobias & Atkinson, Giles, 2022. "Understanding public support for international climate adaptation payments: evidence from a choice experiment," LSE Research Online Documents on Economics 112963, London School of Economics and Political Science, LSE Library.

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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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