Policy Instruments for Environmental and Natural Resource Management

657 Pages·2011·2.548 MB·English

by  Thomas Sterner, Jessica Coria

Policy Instruments for Environmental and
Natural Resource Management
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Policy Instruments for
Environmental and Natural
Resource Management
Second Edition
Thomas Sterner and Jessica Coria
New York (cid:129) London
First published 2003, this edition published 2012
by RFF Press
711 Third Avenue, New York, NY 10017
Simultaneously published in the UK and ROW
by RFF Press
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
RFF Press is an imprint of the Taylor & Francis Group, an informa business
© 2003, 2012 Thomas Sterner and Jessica Coria
The right of Thomas Sterner and Jessica Coria to be identified as the authors has been
asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act
1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilised in any
form or by any electronic, mechanical, or other means, now known or hereafter invented,
including photocopying and recording, or in any information storage or retrieval system,
without permission in writing from the publishers.
The findings, interpretations, and conclusions offered in RFF Press publications are those
of the authors. They do not necessarily represent the views of Resources for the Future, its
directors, or its officers. Similarly, any geographic boundaries and titles depicted in RFF
Press publications do not imply any judgment or opinion about the legal status of a terri-
tory on the part of Resources for the Future.
Trademark notice: Product or corporate names may be trademarks or registered trade-
marks, and are used only for identification and explanation without intent to infringe.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
A catalog record for this book has been applied for
ISBN: 978-1-61726-097-1 (hbk)
ISBN: 978-1-61726-098-8 (pbk)
Typeset in Minion and Myriad
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About Resources for the Future
and RFF Press
Resources for the Future (RFF) improves environmental and natural resource
policymaking worldwide through independent social science research of the
highest caliber. Founded in 1952, RFF pioneered the application of economics
as a tool for developing more effective policy about the use and conservation
of natural resources. Its scholars continue to employ social science methods
to analyze critical issues concerning pollution control, energy policy, land and
water use, hazardous waste, climate change, biodiversity, and the environ-
mental challenges of developing countries.
RFF Press supports the mission of RFF by publishing book-length works that
present a broad range of approaches to the study of natural resources and
the environment. Its authors and editors include RFF staff, researchers from
the larger academic and policy communities, and journalists. Audiences for
publications by RFF Press include all of the participants in the policymaking
process—scholars, the media, advocacy groups, NGOs, professionals in busi-
ness and government, and the public. RFF Press is an imprint of Earthscan,
a global publisher of books and journals about the environment and sustain-
able development.
Resources for the Future
Directors
Vicky A. Bailey Kathryn S. Fuller Sally Katzen
Trudy Ann Cameron David G. Hawkins Richard Schmalensee
Preston Chiaro Deborah Hechinger Robert N. Stavins
Mohamed T. El-Ashry Peter R. Kagan Joseph Stiglitz
Linda J. Fisher Rubén Kraiem Mark R. Tercek
Officers
W. Bowman Cutter, Chair
John M. Deutch, Vice Chair
Lawrence H. Linden, Treasurer
Frank E. Loy, Vice Chair
Philip R. Sharp, President
Edward F. Hand, Vice President–Finance and Administration
Laurel L. Harvey, Vice President–Development and Corporate Secretary
Mark A. Cohen, Vice President–Research
Editorial Advisers for RFF Press
Walter A. Rosenbaum, University of Florida
Jeffrey K. Stine, Smithsonian Institution
To Greta for a good past
To Gustav, Erik, and Kalle for a sustainable future
To all of you and to Lena for sharing the present
Thomas
To Magnus for your constant support
Jessica
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Contents
Preface xi
Acknowledgments xiii
Abbreviations xvi
1. Background and Overview 1
Part I: The Need for Environmental and Natural Resource Policy 11
2. Causes of Environmental Degradation 15
3. The Evolution of Rights 42
Part II: Review of Policy Instruments 57
4. Direct Regulation of the Environment 61
5. Taxes 73
6. Tradable Permits 82
7. Subsidies, Deposit–Refund Schemes, and
Refunded Emissions Payments 108
8. Property Rights, Legal Instruments, and Informational Policies 116
Part III: Selection of Policy Instruments 139
9. Efficiency of Policy Instruments 143
10. Role of Uncertainty and Information Asymmetry 163
11. Equilibrium Effects and Market Conditions 181
12. Distribution of Costs 198
13. Politics and Enforcement of Policy Instruments 214
ix