Priceline for Pollution: Auctions to Allocate Public Pollution Control Dollars

Abstract

In addition to regulatory strategies, the federal government has spent large amounts of money to pay for or to subsidize pollution control and other environmental measures. Although those expenditures have often achieved environmental improvements, they have not always done so as cost effectively as possible. The use of auctions to distribute funds could significantly improve the cost effectiveness of public spending programs for environmental protection, as it has in other areas of government procurement.

Keywords: Auctions, Auction Theory, Pollution, Pollution Control, Environmental Protection, Pollution Control Markets