ENVI 230 Lecture Notes - Lecture 17: Environmental Policy, Pigovian Tax, Sagebrush Rebellion
31 Mar 2017
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Backlash to environmental regulations & markets in environmental quality. Market = a series of rules regarding entry, exit, fees, etc. Direct regulation of an industry or activity by a policy that states what is permitted and what is illegal. Only implies the use of economic incentives to meet a policy goal. ****each of the following is an example of a market-based policy except**** Recall: only economics will dictate new energy! Encourage a reduction of negative externalities by altering cost structure. Pigouvian taxes tax pollution (externalities) at the marginal cost of harm. Coase theorem in a world without transaction costs, there will be optimal outcome regardless of initial distribution of property rights. Idea: determine social preference for level of pollution, tax polluters until that preference level is met. Debate framed as invasion of property rights. Reagan appoints key actors to key position. By 1990s, fully mobilized anti-environmental regulation movement.
