Correct (and Misleading) Arguments for Market-Based Pollution Control Policies.
The extent to which climate change policy will rely on market-based rather than command-and-control policies is a matter of current debate. This research shows why neither policy, in general, has a greater claim to being “environmentally friendly.” However, market-based policies eliminate a type of regulatory uncertainty that arises under command-and-control policies. In addition, the anticipation that the regulator will use market-based policies leads to investment decisions that increase the value of markets.
climate change policy, market-based policies, command-and-control policies
Karp, Larry. 2008. "Correct (and Misleading) Arguments for Market-Based Pollution Control Policies." ARE Update 11(6): 1-3. University of California Giannini Foundation of Agricultural Economics.