Abstract Price instruments and quantity instruments are similar market policy mechanisms to reduce pollution. Both types of instruments impose a price on each unit of emissions, creating a marginal cost of emitting, and seeking to internalise costs of pollution. Both decentralise emissions abatement decisions and devolve them to the emitters themselves, minimising adjudication. Both minimise overall abatement costs by sorting polluters by marginal abatement cost, and diverting emissions reduction efforts to those that can make reductions at lower costs. However, the instruments differ in terms of their emphases. A quantity instrument seeks to maintain some quantity of emissions, while potentially allowing the price of emissions permits – the mechanism for enforcing a quantity limit – to fluctuate. A price instrument seeks to maintain a constant price of emissions through some unitary tax – the mechanism for enforcing an emissions price – while potentially allowing the quantity of emissions to fluctuate.
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Abstract This chapter surveys the use of private and public property rights as environmental policy instruments. Private property rights can mitigate commons challenges and supplement public land acquisition strategies for conservation purposes, but both public and private land ownership involve policy risks. Property remains, in the main, a fundamentally conservative legal institution, and one only occasionally suited to manipulation in the service of specific policy objectives.
Orr Karassin and Oren Perez
Abstract Over the past two centuries, global environmental governance has been a field in continuous shift. Private transnational schemes have assumed an increasingly important role in the regulation of global environmental challenges. The flourishing of private transnational regulation (PTR) regimes has not occurred in isolation from public environmental regulation (PER). This chapter develops a detailed taxonomy of the forms of interaction between PTR and PER, which includes, it is argued, five key forms: incorporation, facilitation, abstention, substitution, and suppression. The chapter further discusses the optimal distribution of authority between the PTR and PER in view of the foregoing taxonomy. It identifies several variables which are central to answering this question and applies them to several case studies.
Sarah E Light and Eric W Orts
Abstract Procurement has become an increasingly important method of environmental governance. Public actors at the federal, state, and local levels in the United States have leveraged their significant purchasing power to reduce the environmental impacts of their purchases of goods, services, and energy. Other governments around the globe, including the European Union and many individual nation-states, have likewise adopted public environmentally preferable purchasing rules, with significant positive impacts. Finally, the private sector has increasingly used environmental supply chain management to reduce its environmental impacts. This chapter (a) explores what motivates both public and private actors to adopt environmental procurement as a governance strategy; (b) examines the direct and indirect impacts of environmental procurement; (c) describes specific procurement rules in the United States and the European Union; and (d) argues that the use of private environmental supply chain management by business firms operates as a parallel form of environmental governance.
Kenneth R Richards
Abstract There are a wide range of environmental policy instruments available to governments. Often they are treated as independent items on a menu of possible choices. It is useful, instead, to understand the instruments within a theoretical and practical framework. As described here, a useful approach is to first organise the policy instruments by tying them to the specific market failures that they are designed to address and then to further differentiate them according to whether the instruments rely on public ordering or private ordering. Those instruments based on public ordering can then be distinguished according to how they distribute the costs of environmental protection between the polluter and the public and the extent of discretion the government allows private parties in determining how to meet environmental goals. The result is a systematic approach that facilitates policy instrument research, use and evaluation.
Neil Gunningham and Darren Sinclair
Abstract Smart Regulation embraces complementary combinations of environmental instruments tailored to specific policy circumstances. It seeks to build on the concept of an enforcement pyramid, that is at the core of responsive regulation, by engaging government as well as business and other third parties in the regulatory process. As such, it canvasses a range of environmental instruments, including information, self-regulation, co-regulation, economic instruments, as well as command and control regulation. The use and application of various instrument combinations and regulatory actors are governed by a set of regulatory design principles that can adapt to different environmental imperatives and circumstances, and aim to provide for better regulatory outcomes. In this regard, complementary combinations of instruments are key. The principles of Smart Regulation are pertinent today where governments confront complex environmental issues, and yet appear unable or unwilling to produce adequate regulatory responses.
Adam D K Abelkop
Abstract A tort is an action or inaction that gives rise to civil legal liability by causing an injury to another without their consent. In the environmental and public health context, injuries may arise from exposure to pollutants in air and water, chemicals in consumer products, and damage to natural resources. This chapter discusses the various ways in which tort law acts as an environmental policy tool to remedy these types of injuries. Tort law is primarily private law. That is, it is an instrument of justice and recourse that allows an injured party to reassert their rights against the wrongdoer that violated them and imparts a duty on the injurer to correct their wrongdoing to the extent possible. The administration of tort law also has widespread public effects. Tort law’s broadly recognised public functions are deterrence of injuries from overly risky activity and provision of social insurance through the cost-spreading of accidents. Tort law also influences behaviour and the policy process indirectly by engaging the liability insurance industry as a secondary regulator and by overcoming information asymmetries. In all of these ways, tort law provides an important complement to many of the other tools discussed in this volume.
Tracey M Roberts
Abstract Environmental subsidies are market-based instruments that change the prices of goods and services to encourage their development and use for the benefit of the environment. Subsidised goods and services may provide a benefit directly or they may serve as a less harmful alternative to existing products and services. This chapter discusses the ways the structure of a subsidy impacts its efficiency and effectiveness and examines the use of subsidies at national and subnational levels to promote conservation, conduct environmental regulation, and support natural resource extraction and use. Finally, the chapter outlines current challenges to coordinating these and other policies to achieve globally beneficial environmental outcomes.
Laura M J McCann
Abstract Transaction costs relating to environmental policy can be thought of as the time and other resources used to establish, transfer, and enforce property rights. Transaction costs are important for environmental and natural resource issues, but especially so in the case of nonpoint source pollution. These costs need to be considered in the choice of both environmental policy instruments and the design of those instruments. The determinants of transaction cost magnitudes include both physical and institutional factors, for example the geographical scope of the problem as well as the existing laws. Incorporation of insights from the analysis of transaction costs leads to the consideration of pragmatic issues in the design of policy instruments. It also highlights the interdisciplinary nature of environmental and natural resource policy.
Stephanie Hayes Richards and Kenneth R Richards
Abstract Voluntary environmental agreements (VEAs) emerged in the early 1990s as an alternative to command and control and market-based approaches. There is a broad range of approaches, with goals that incorporate environmental protection, information diffusion, and research and development. While VEAs generally involve government agencies, some definitions extend to include purely private agreements. Sponsors have used a broad range of inducements for participation, including the threat of regulation, regulatory relief, technical assistance, public recognition and financial support. There is still a significant question about the effectiveness of VEAs as a pollution control mechanism, but given the relatively low private and public costs involved, governments have relied on this mechanism to reduce political resistance and to provide flexibility.