IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Are cap-and-trade programs more environmentally effective than conventional regulation?

Listed author(s):
  • A. Denny Ellerman
Registered author(s):

    Market-based instruments (MBI’s) are advocated because of their presumed lower economic cost in comparison with conventional regulatory instruments. The environmental effectiveness of the MBI is typically assumed to be the same as that of the conventional alternative (Crocker, 1966; Dales, 1968; Montgomery, 1972). Recent experience with cap-and-trade systems has confirmed the economic advantages of MBI’s (Ellerman et al., 2000; Carlson et al., 2000; Ellerman et al., 2003) and failed to find a degradation of environmental performance (Burtraw and Mansur, 1999; Swift, 2000). As a result, MBI’s, and especially cap-and-trade systems, have become widely accepted in the policy community. Recognizing this circumstance, opponents of the use of MBIs tend to attack the assumption that the environmental performance is equal (Clear the Air, 2002; Moore, 2002). Their argument is that, while the economic performance may be better, the environmental performance is worse, and that the increased environmental damages outweigh the savings in abatement cost.

    If 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.

    File URL:
    Download Restriction: no

    Paper provided by Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research in its series Working Papers with number 0315.

    in new window

    Date of creation: Sep 2003
    Handle: RePEc:mee:wpaper:0315
    Contact details of provider: Postal:
    77 Massachusetts Ave. (Building E40-279), Cambridge, MA 02139-4307

    Phone: (617) 253-3551
    Fax: (617) 253-9845
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:mee:wpaper:0315. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sharmila Ganguly)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.