About the Author
Robert N. Stavins is the Albert Pratt Professor of Business and Government, Director of the Harvard Environmental Economics Program, and Chairman of the Environment and Natural Resources Faculty Group.
Category Archives: Environmental Economics
Can Countries Cut Carbon Emissions Without Hurting Economic Growth?
In the September 21st issue of the Wall Street Journal, the editors pose the following question: can countries cut carbon emissions without hurting economic growth? In his introductory essay, Michael Totty frames the issues as follows: “There’s little doubt: Cutting … Continue reading
Posted in Climate Change Policy, Energy Economics, Energy Policy, Environmental Economics, Environmental Policy
Tagged American Enterprise Institute, Australia, benefit-cost analysis, Brazil, cap-and-trade, carbon leakage, China, COP-15, Copenhagen, cost-effectiveness, distributional equity, economic growth, environmental politics, European Union, global climate policy, India, Indonesia, linkage of cap-and-trade systems, Major Economies Forum, market-based environmental policies, Mexico, National Commission on Energy Policy, Obama Administration, revenue-neutral taxes, South Africa, South Korea, U.S. Climate Action Partnership, U.S. Congressional Budget Office, U.S. Energy Information Administration, U.S. House of Representatives, UN Intergovernmental Panel on Climate Change (IPCC), Wall Street Journal, Waxman-Markey legislation
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Three Pillars of a New Climate Pact
THE climate change summit at the United Nations on Tuesday, September 22nd, is aimed to build momentum for the 15th Conference of the Parties to the UN Framework Convention on Climate Change in Copenhagen in December, where nations will continue … Continue reading
Posted in Climate Change Policy, Environmental Economics, Environmental Policy
Tagged Australia, Canada, cap-and-trade, carbon leakage, China, climate agreements, COP-15, cost-effectiveness, distributional equity, European Union, externalities, free rider problem, G20, global climate policy, growth targets, international climate policy architecture, Japan, Kyoto Protocol, linkage of cap-and-trade systems, market-based environmental policies, New Zealand, Obama Administration, U.S. House of Representatives, U.S. Senate, United Nations, Waxman-Markey legislation
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Too Good to be True?
Global climate change is a serious environmental threat, and sound public policies are needed to address it effectively and sensibly. There is now significant interest and activity within both the U.S. Administration and the U.S. Congress to develop a meaningful … Continue reading
Posted in Climate Change Policy, Energy Economics, Energy Policy, Environmental Economics, Environmental Policy
Tagged AB 32, benefit-cost analysis, California, cap-and-trade, common property resources, cost-effectiveness, energy efficiency, environmental politics, externalities, free rider problem, global climate policy, market-based environmental policies, regulation, U.S. House of Representatives, U.S. Senate, Waxman-Markey legislation
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What is the Future of U.S. Coal?
Climate concerns have gone mainstream, even in the United States. This has been reflected in the passage by the U.S. House of Representatives of HR 2454, the so-called Waxman-Markey bill, and will soon be reflected in the debates in the … Continue reading
Posted in Climate Change Policy, Energy Economics, Energy Policy, Environmental Economics, Environmental Policy
Tagged cap-and-trade, carbon capture and storage (CCS), environmental politics, global climate policy, market-based environmental policies, regulation, U.S. House of Representatives, U.S. Senate, Waxman-Markey legislation
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Cap-and-Trade: A Fly in the Ointment? Not Really
For more than two decades, environmental law and regulation was dominated by command-and-control approaches — typically either mandated pollution control technologies or inflexible discharge standards on a smokestack-by-smokestack basis. But in the 1980s, policy makers increasingly explored market-based environmental policy … Continue reading
Posted in Climate Change Policy, Environmental Economics, Environmental Policy
Tagged acid rain, cap-and-trade, cost-effectiveness, distributional analysis, distributional equity, efficiency, environmental politics, global climate policy, market-based environmental policies, regulation, transaction costs, U.S. House of Representatives, U.S. Senate, Waxman-Markey legislation
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Policies Can Work in Strange Ways
Whether the policy domain is global climate change or local hazardous waste, it’s exceptionally important to understand the interaction between public policies and technological change in order to assess the effects of laws and regulations on environmental performance. Several years … Continue reading
Posted in Climate Change Policy, Corporate Social Responsibility, Environmental Economics, Environmental Policy
Tagged chlorine, chlorofluorocarbons (CFCs), Clean Air Act, Clean Water Act, Cluster Rule, Compensation, Comprehensive Environmental Response Compensation and Liability Act, econometric analysis, environmental politics, externalities, global climate policy, green jobs, hazardous waste, Minamata, Montreal Protocol, pulp and paper, regulation, Resource Conservation and Recovery Act, technological change, Toxics Release Inventory
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What Role for U.S. Carbon Sequestration?
With the development of climate legislation proceeding in the U.S. Senate, a key question is whether the United States can cost-effectively reduce a significant share of its contributions to increased atmospheric CO2 concentrations through forest-based carbon sequestration. Should biological carbon … Continue reading
Posted in Climate Change Policy, Environmental Economics, Environmental Policy, Forest Policy
Tagged cap-and-trade, carbon sequestration, cost-effectiveness, efficiency, energy efficiency, environmental politics, forestry, global climate policy, market-based environmental policies, U.S. House of Representatives, U.S. Senate, Waxman-Markey legislation
15 Comments
Is Benefit-Cost Analysis Helpful for Environmental Regulation?
With the locus of action on Federal climate policy moving this week from the House of Representatives to the Senate, this is a convenient moment to step back from the political fray and reflect on some fundamental questions about U.S. … Continue reading
Posted in Climate Change Policy, Energy Economics, Energy Policy, Environmental Economics, Environmental Policy, Natural Resource Economics, Natural Resource Policy
Tagged benefit-cost analysis, cost-effectiveness, distributional analysis, distributional equity, economic valuation, efficiency, environmental politics, externalities, first welfare theorem, global climate policy, information problems, market failure, monetary values, Obama Administration, Office of Management and Budget, regulation, Regulatory Impact Analysis, U.S. House of Representatives, U.S. Senate, uncertainty, Waxman-Markey legislation
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National Climate Change Policy: A Quick Look Back at Waxman-Markey and the Road Ahead
Like any legislation, the Waxman‑Markey bill has its share of flaws, but its cap-and-trade system has medium and long‑term targets for reducing greenhouse gas emissions that are sensible, and the cap‑and‑trade system is — for the most part — well … Continue reading
Posted in Climate Change Policy, Energy Economics, Energy Policy, Environmental Economics, Environmental Policy
Tagged cap-and-trade, common property resources, Congressional Budget Office, cost-effectiveness, environmental politics, global climate policy, import allowance requirement, market failure, market-based environmental policies, Obama Administration, Office of Management and Budget, output-based updating allocation, U.S. House of Representatives, U.S. Senate, Waxman-Markey legislation
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Worried About International Competitiveness? Another Look at the Waxman-Markey Cap-and-Trade Proposal
The potential impacts of proposed U.S. climate policies on the competitiveness of U.S. industries is a major political issue, and it was one of the key issues in the Energy and Commerce Committee of the House of Representatives in the … Continue reading
Posted in Climate Change Policy, Environmental Economics, Environmental Policy
Tagged aluminum, Australia, Brazil, cap-and-trade, cement, China, comparative advantage, developing countries, efficiency, environmental politics, European Union, fossil fuels, free rider problem, glass, global climate policy, Harvard Project on International Climate Agreements, import allowance requirement, India, Indonesia, international climate agreement, international copetitiveness, International Reserve Allowance Program, iron, Japan, leakage, Lieberman-Warner Climate Security Act of 2008, linkage of cap-and-trade systems, market-based environmental policies, Mexico, New Zealand, Obama Administration, output-based updating allocation, paper, revenue-neutral taxes, South Africa, steel, U.S. House of Representatives, U.S. Senate, Waxman-Markey legislation, World Trade Organization (WTO)
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The Wonderful Politics of Cap-and-Trade: A Closer Look at Waxman-Markey
The headline of this post is not meant to be ironic. Despite all the hand-wringing in the press and the blogosphere about a political “give-away” of allowances for the cap-and-trade system in the Waxman-Markey bill voted out of committee … Continue reading
Posted in Climate Change Policy, Energy Policy, Environmental Economics, Environmental Policy, Positive Political Economy
Tagged allowance allocation, cap-and-trade, cost incidence, cost-effectiveness, distributional analysis, distributional equity, efficiency, environmental politics, global climate policy, Hamilton Project, import allowance requirement, local distribution companies, market-based environmental policies, Obama Administration, Office of Management and Budget, output-based updating allocation, regulation, Regulatory Impact Analysis, revenue-neutral taxes, Waxman-Markey legislation
45 Comments
Does economic analysis shortchange the future?
Decisions made today usually have impacts both now and in the future. In the environmental realm, many of the future impacts are benefits, and such future benefits — as well as costs — are typically discounted by economists in their … Continue reading
Posted in Climate Change Policy, Energy Economics, Energy Policy, Environmental Economics, Environmental Policy, Natural Resource Economics
Tagged benefit-cost analysis, discount rate, discounting, distributional analysis, distributional equity, economic valuation, efficiency, global climate policy, monetary values, Office of Management and Budget, regulation, Regulatory Impact Analysis, temporal analysis, time, uncertainty
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What Baseball Can Teach Policymakers
With the Major League Baseball season having just begun, I’m reminded of the truism that the best teams win their divisions in the regular season, but the hot teams win in the post-season playoffs. Why the difference? The regular season … Continue reading
Posted in Environmental Economics, Environmental Policy
Tagged baseball, benefit-cost analysis, cost-effectiveness, efficiency, information problems, Monte Carlo analysis, Nonroad Diesel Rule, Obama Administration, Office of Management and Budget, regulation, Regulatory Impact Analysis, uncertainty
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Moving Beyond Vintage-Differentiated Regulation
A common feature of many environmental policies in the United States is vintage-differentiated regulation (VDR), under which standards for regulated units are fixed in terms of the units’ respective dates of entry, with later vintages facing more stringent regulation. In … Continue reading
A Tale of Two Taxes
Whether they are called “revenue enhancements” or “user charges,” fear of the political consequences of taxes restricts debate on energy and environmental policy options in Washington. In a March 7th post on “Green Jobs,” in which I argued that it … Continue reading
Posted in Energy Economics, Energy Policy, Environmental Economics, Environmental Policy
Tagged cost-effectiveness, distributional equity, efficiency, environmental politics, externalities, gasoline taxes, global climate policy, green jobs, market failure, market-based environmental policies, revenue-neutral taxes
9 Comments
The Myths of Market Prices and Efficiency
In my two previous posts I described a pair of prevalent myths regarding how economists think about the environment: “the myth of the universal market” – the notion that economists believe that the market solves all problems; and “the myth … Continue reading
The Myth of Simple Market Solutions
I introduced my previous post by noting that there are several prevalent myths regarding how economists think about the environment, and I addressed the “myth of the universal market” – the notion that economists believe that the market solves all … Continue reading
The Myth of the Universal Market
Communication among economists, other social scientists, natural scientists, and lawyers is far from perfect. When the topic is the environment, discourse across disciplines is both important and difficult. Economists themselves have likely contributed to some misunderstandings about how they think … Continue reading