Environmental Law and Policy.pdf

1、NBER WORKING PAPER SERIES ENVIRONMENTAL LAW AND POLICY Richard L.Revesz Robert Stavins Working Paper 13575 http:/www.nber.org/papers/w 1357 5 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts A venue Cambridge,MA 02138 November 2007 Katharine Emans,Nicholas Bagley,and Gernot Wagner provided va

2、luable research assistance,and helpful comments on previous versions were provided by Dallas Burtraw,Daniel Esty,Myrick Freeman,Robert Hahn,Louis Kaplow,Nathaniel Keohane,Charles Kolstad,Peter Menell,Richard Newell,Sheila Olmstead,Mitchell Polinsky,Paul Portney,Steven Shavell,and Kerry Smith.The aut

3、hors alone are responsible for any remaining errors.The views expressed herein are those of the author(s)and do not necessarily reflect the views of the National Bureau of Economic Research.2007 by Richard L.Revesz and Robert Stavins.All rights reserved.Short sections of text,not to exceed two parag

4、raphs,may be quoted without explicit permission provided that full credit,including notice,is given to the source.Environmental Law and Policy Richard L.Revesz and Robert Stavins NBER Working Paper No.13575 November 2007 JEL No.K32,Q28,Q38,Q48 ABSTRACT This chapter for the Handbook of Law and Econom

5、ics provides an economic perspective of environmental law and policy.We examine the ends of environmental policy,that is,the setting of goals and targets,beginning with normative issues,notably the Kaldor-Hicks criterion and the related method of assessment known as benefit-cost analysis.We examine

6、this analytical method in detail,including its theoretical foundations and empirical methods of estimation of compliance costs and environmental benefits.We review critiques of benefit-cost analysis,and examine alternative approaches to analyzing the goals of environmental policies.We examine the me

7、ans of environmental policy,that is,the choice of specific policy instruments,beginning with an examination of potential criteria for assessing alternative instruments,with particular focus on cost-effectiveness.The theoretical foundations and experiential highlights of individual instruments are re

8、viewed,including conventional,command-and-control mechanisms,market-based instruments,and liability rules.Three cross-cutting issues receive attention:uncertainty;technological change;and distributional considerations.We identify normative lessons in regard to design,implementation,and the identific

9、ation of new applications,and we examine positive issues:the historical dominance of command-and-control;the prevalence in new proposals of tradeable permits allocated without charge;and the relatively recent increase in attention given to market-based instruments.We also examine the question of how

10、 environmental responsibility is and should be allocated among the various levels of government.We provide a positive review of the responsibilities of Federal,state,and local levels of government in the environmental realm,plus a normative assessment of this allocation of regulatory responsibility.

11、We focus on three arguments that have been made for Federal environmental regulation:competition among political jurisdictions and the race to the bottom;transboundary environmental problems;and public choice and systematic bias.Richard L.Revesz 110 West Third Street,Room 218 New York,NY 10012 reves

12、zturing.law.nyu.edu Robert Stavins JFK School of Government Harvard University 79 JFK Street Cambridge,MA 02138 and NBER robert_stavinsharvard.edu TABLE OF CONTENTS 1.INTRODUCTION.1 2.SETTING GOALS AND TARGETS:THE ENDS OF ENVIRONMENTAL POLICY.4 2.1 Normative Issues and Analysis.4 2.1.1 Criteria for

13、Environmental Policy Evaluation.4 2.1.2 Benefit-Cost Analysis of Environmental Regulations.7 2.1.2.1 Discounting.7 2.1.2.2 Benefit Concepts and Taxonomies.9 2.1.2.3 Cost Concepts and Taxonomies.10 2.1.2.4 Cost Estimation Methods.11 2.1.2.5 Benefit Estimation Methods.12 2.1.2.5.1 Revealed Preference

14、Methods.12 2.1.2.5.2 Stated Preference Methods.17 2.1.2.5.3 Fallacious Methods of Benefit Estimation.19 2.1.2.5.4 Benefit Transfer.19 2.1.2.5.5 Valuing Mortality Risk Reductions.20 2.1.2.6 Critiques of Benefit-Cost Analysis.22 2.1.3 Other Approaches to Analyzing the Goals of Environmental Policies.2

15、3 2.2 Positive Issues and Analysis.25 2.2.1 Executive Orders.25 2.2.2 Legislative Enactments.26 2.2.3 Judicial Recognition.30 2.2.4 A Political Economy Perspective on How Standards Are Set.30 3.CHOOSING INSTRUMENTS:THE MEANS OF ENVIRONMENTAL POLICY.31 3.1 Normative Issues and Analysis.31 3.1.1 Poten

16、tial Criteria for Choosing Among Policy Instruments.32 3.1.2 Alternative Policy Instruments.33 3.1.2.1 Command-and-Control versus Market-Based Instruments.34 3.1.2.2 Pollution Charges.35 3.1.2.3 TradeablePermitSystems.37 3.1.2.4 Market Friction Reduction.40 3.1.2.5 Government Subsidy Reduction.41 3.

17、1.2.6 Liability Rules.41 3.1.2.6.1 Joint and Several versus Non-Joint Liability.43 3.1.2.6.2 Liability Extension.43 3.1.3 Cross-Cutting Issues.45 3.1.3.1 Implications of Uncertainty for Instrument Choice.45 3.1.3.2 Effects of Instrument Choice on Technological Change.46 3.1.3.3 Distributional Consid

18、erations.47 3.1.4 Normative Lessons.49 3.1.4.1 Design and Implementation.49 3.1.4.2 Identifying New Applications.50 3.2 Positive Issues and Analysis.50 3.2.1 Historical Dominance of Command-and-Control.51 3.2.2 Prevalence of Tradeable Permits Allocated Without Charge.53 3.2.3 Increased Attention to

19、Market-Based Instruments.54 11 4.ALLOCATION OF RESPONSIBILITY ACROSS LEVELS OF GOVERNMENT.56 4.1 Positive Review of Responsibility of Levels of Government.4.2 Normative Review of Allocation of Regulatory Responsibility.4.2.1 Competition Among Political Jurisdictions:The Race to the Bottom.4.2.2 4.2.

20、3 4.2.1.1 Normative Assessment of the Race-to-the-Bottom Claim.4.2.1.2 Positive Assessment of the Race-to-the-Bottom Claim.Transboundary Environmental Problems.Public Choice and Systematic Bias.56 57 57 57 59 59 60 4.2.3.1 Normative Foundation for Public Choice Claims.61 4.2.3.2 Positive Support for

21、 Public Choice Pathologies.61 5.CONCLUSIONS.62 Table 1:Costs of Selected Environmental,Health,and Safety Regulations.64 Table 2:Deposit-Refund Systems for Two Regulated Products.65 Table 3:Federal User Charges.66 Table 4:Federal Insurance Premium Taxes.67 Table 5:Federal Sales Taxes.67 Table 6:Feder

22、al Tax Differentiation.68 Table 7:Major U.S.Tradeable Permit Systems.69 Table 8:Federal and Selected State Information Programs.70 REFERENCES.71 111 ENVIRONMENTAL LAW AND POLICY Richard L.Revesz and Robert N.Stavins*1.INTRODUCTION An economic perspective can provide clarity regarding the causes and

23、consequences of environmental degradation,and thereby provide insights regarding public policies intended to protect the environment.This is true both with regard to normative and positive assessments of environmental policies.Despite this value,an economic perspective is by no means a perfect subst

24、itute for other legitimate perspectives on environmental law and policy,whether from the natural sciences,from ethics,or from other disciplines.Rather,an economic perspective is a valuable complement to such views.Indeed,over the past several decades,as the attention given to environmental issues in

25、 the United States has grown,greater consideration has also been given to the efficiency,cost-effectiveness,and distributional equity of laws and regulations intended to protect the environment.l In an effort to be rigorous in our review while keeping the treatment to reasonable length,we have impos

26、ed limits on the scope of our coverage.First,we focus on pollution control,and do not consider natural resource management,despite the fact that these two areas are closely related.Second,we concentrate our attention on environmental protection efforts at the federal level in the United States,and d

27、o not examine state,local,or international regulatory efforts.We begin with the core question of whether and why environmental regulation is needed,considering the fact that under many conditions unconstrained markets produce socially desirable outcomes.What about in the environmental sphere?Under w

28、hat specific circumstances will governmental intervention be appropriate?The fundamental theoretical argument for government activity in the environmental realm is that pollution is a classic example of an externality-an unintended consequence of market decisions,which affects individuals other than

29、 the decision maker.Because firm-level decisions do not take into account full social costs,pollutant emissions*Revesz is Dean of the New York University School of Law,where he is the Lawrence King Professor of Law,and Director,Program on Environmental Regulation,Center on Environmental and Land Use

30、 Law.Stavins is the Albert Pratt Professor of Business and Government at the John F.Kennedy School of Government,Director of the Environmental Economics Program at Harvard University,and a University Fellow,Resources for the Future.Katharine Emans,Nicholas Bagley,and Gernot Wagner provided valuable

31、research assistance,and helpful comments on previous versions were provided by Dallas Burtraw,Daniel Esty,Myrick Freeman,Robert Hahn,Louis Kaplow,Nathaniel Keohane,Charles Kolstad,Peter Menell,Richard Newell,Sheila Olmstead,Mitchell Polinsky,Paul Portney,Steven Shavell,and Kerry Smith.The authors al

32、one are responsible for any remaining errors.1We follow the standard definition of an efficient environmental policy as being one that involves a target-such as a 50 percent reduction in sulfur dioxide(SO2)emissions-that maximizes the difference between social benefits and social costs,i.e.,a target

33、 level at which marginal benefits and marginal costs are equated.By cost-effective policies,we refer to those that take(possibly inefficient)targets as given by the political process,but achieve those targets with policy instruments-such as a tradeable permit system in the SO2 case-that minimize aggregate costs.Assessments of the distributional implications of environmental policies include analys