Home
Up

Choosing Policy Instruments
  

Topics
bulletCommand and control regulation
bulletMarkets and trading systems
bulletEducation, information, and labeling
bulletGrants and direct action (habitat restoration)
bulletLand acquisition
bulletTax Policy
     

Readings
bullet

L: Ch. 11, 12, 14

bullet

RES 28, 29, 30, 31, 32

bullet

R: Ch. 6, 7, 10
   

Lecture Notes
bullet View or print lecture notes as a adobe acrobat file
bulletDownload this handout that summarized the wide range policy instruments
bulletAdditional readings and web resources related to this topic can also be found on my PLS 505 website if you are having trouble understanding the materials in the lecture notes.
         

Handouts
bulletEconomic theories and concepts play an important role in shaping the policy instruments and alternatives that are available to address environmental problems.  For an interesting example of the connection between supply and demand, see this interesting article from the USA Today (1/12) on how natural gas exploration (increased supply) is driving prices down.  Conversely, this article discusses how tariffs limit the importation of ethanol from Brazil, which raises costs for U.S. consumers (Desmoine Register 2008)
bulletCommand and control regulations are one of the frequent policy instruments, particularly when it comes to air and water quality issues.  This leads to lots of charges that the regulations "cost jobs" or impose other economic inefficiencies that could be avoided using other policy instruments.  A recent manifestation of this policy fight concerns a proposed set of regulations for coal fired power plants (See this Washington Post article - 8/11).  This led to charges that the proposed regulation would kill thousands of jobs and boost energy bills (see this article from US News - 6/11).  But is the charge true?  See this  presentation from NERA Economic consulting (6/11) and this report from the Congressional Research Service (8/11) and judge for yourself.  Others obviously make the counter argument - a healthy environment creates and protects jobs.  See this interesting report (9/11) from Restore America's Estuaries that makes this argument. 
bullet GAO Report: Environmental Litigation: Cases against EPA and Associated Costs over Time (GAO-11-650). 
bullet Sometimes government chooses to deregulate activities.  See this article about some recent efforts to streamline government regulations (5/11).   Although, many advocate further deregulation.  For example, Sen. Rand Paul wants government to further deregulate toilets and light bulbs (Politico 3/11).  Many republicans have also been trying to undue the regulation phasing out the incandescent light bulb (See this story from AP 7/11). 
bullet Taxes on the supply or demand side are often used to influence behavior.  For example, there is a proposal for Dutch drivers to pay a tax based on their time on the road rather than charging a purchase tax and road tax (AP 11/09).  Locally, the Cape Fear Public Utility Authority has been criticized because it changed the rate structure to create incentives to use less water (Star News 6/09).  (see also the article about the water allocation scandal involving Governor Easley). 
bullet The Obama Administration floats a proposal to create a vehicle miles traveled tax (The Hill 5/11).  How might this influence driver behavior or the purchasing or automobiles? 
bullet Sometimes government chooses to subsidize the production or consumption of a particular product of service using grants, loans, and loan guarantees.  See this article from describing the wide scale use of subsidies for clean energy in recent years (NY Times - 11/11/11).  However, there have been a number of notable failures with the Green jobs programs promoted by President Obama (See this collection of articles).  Perhaps the most controversial failure is Solyndra (see this collection of articles)
bullet One of the problems of using policy instruments is that they can result in unintended consequences.  See this collection of articles describing some of the problems associated with using stimulus grants and loan guarantees to encourage the production and consumption of clean energy (11/11).  See this article on how subsidizing ethanol production is raising food prices (USA Today 2/11).   This article describes how a tax designed to reduce energy is threatening research on how to produce green energy in the U.K. (Guardian 5/11).  What if cap and trade proposals actually reduced the stigma associated with polluting and actually led to increased pollution (Download article from the Christina Science Monitor - 7/08). 
bulletSometimes tax credits are used to promote consumption.  However, enforcement can be a problem.  See this article on poor IRS enforcement of energy tax credits (GovExec 5/11).  Similarly, see this article on how auto dealerships are scamming Chevy Volt Tax Credits (NLPC 5/11). 
bullet GAO Report: Energy Star Program (process is vulnerable to fraud and abuse) (GAO-10-470). 
bulletSee this collection of articles about attempts to regulate CO2 emissions. 
bullet GAO report: Climate Change: Observations on Options for Selling Emissions Allowances in Cap -and-Trade Program (GAO-10-377)
bulletSee this article from the PA  Times (June 1996) about Market-based approaches and tradeable permits.   While a bit dated, have the issue really changed?
bulletSee this article about a 2010 proposal to use loan guarantees to promote the construction of  nuclear plants
bulletOne interesting area where a number of interesting, albeit controversial, policy alternatives have been crafted is in waste management and recycling.  In Canada, "Big Brother" is watching (11/10) while in Alexandria, VA is putting tracking chips in recycling bins (Washington Examiner 5/10), and Cleveland, OH is using tracking chips to monitor recycling as well (8/10).   In fact, many cities are turning to the "Trash Police" to enforce recycling laws (See this Fox News article 9/10).  To reduce trash volume, they are charging homeowners for trash collection in the UK in new ways and many  cities in the U.S. are now thinking about this controversial approach to funding trash collection.  Others are taking a different approach and are dropping recylcing programs due to their added expense (See this article about Ocean city, MD 5/10). 
         

Web Resources
The following agency websites may prove useful as we move through the semester. 
   

Book's that Might Be of Interest
For some readings on how to find solutions to environmental problems see:
bulletRogers, Everett M.. 1995. Diffusion of Innovations. New York, NY: The Free Press. 
bulletRose, Richard. 1993. Lesson-Drawing in Public Policy: A Guide to Learning Across Time and Space. Chatham, NJ: Chatham House Publishers
bulletNeustadt, Richard E. and Ernest R. May. 1986. Thinking in Time: The Uses of History for Decision-Makers. New York, NY: The Free Press. 
For some readings on policy instruments see:
bulletSalamon, Lester M.  (ed). 2002. The Tools of Government: A Guide to the New Governance. New York, NY: Oxford University Press.
bulletSalamon, Lester M. (Ed). 1989. Beyond Privatization: The Tools of Government Action. Washington, DC: The Urban Institute Press.

Back to Mark T. Imperial's Homepage

Page last modified 08/17/11

Report problems to imperialm@uncw.edu