Skip to main content Accessibility help
×
Hostname: page-component-7bb8b95d7b-fmk2r Total loading time: 0 Render date: 2024-10-05T09:55:34.080Z Has data issue: false hasContentIssue false

7 - Market-Based Instruments

Published online by Cambridge University Press:  13 September 2019

Michael G. Faure
Affiliation:
Erasmus Universiteit Rotterdam
Roy A. Partain
Affiliation:
University of Aberdeen
Get access

Summary

The Law and Economics literature details how information can be generated from legal rules drawn from both private and public spheres; designing legal rules to become more effective in creating useful information to improve both private and public decision making. We examined the market-based tool known as marketable emission permits or as tradable permits. The ability to sell permits does provide incentives if holders of permits can find greener solutions at prices attractive enough to sell off their permits. Pigou advocated for placing taxes on activities that led to negative externalities; that by carefully adding tax costs to the activity so that the marginal costs could become accurate, fully reflective of the externalities. Coase’s analysis of transaction costs complicates the question of against whom should the taxes be levied. Taxing activities that could give rise to environmental injuries must carefully understand the relative elasticities of demand to ensure that the tax will actually fall on the correct party and thus create the correct incentives. In conclusion, we found that market-based instruments worked best alongside more traditional forms of public regulation, that market-based instruments are not robustly implemented as a stand-alone alternative to traditional forms of public regulation.

Type
Chapter
Information
Environmental Law and Economics
Theory and Practice
, pp. 119 - 144
Publisher: Cambridge University Press
Print publication year: 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×