Environmental Economics

21 Pages Posted: 3 Feb 2005

See all articles by Robert N. Stavins

Robert N. Stavins

Harvard University - Harvard Kennedy School (HKS); Resources for the Future; National Bureau of Economic Research (NBER)

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Abstract

This article, prepared for the forthcoming 2nd edition of the New Palgrave Dictionary of Economics, provides an overview of the economics of environmental policy. Included are the setting of goals and targets, notably the Kaldor-Hicks criterion, and the related method of assessment known as benefit-cost analysis. Also reviewed are the means of environmental policy, that is, the choice of specific policy instruments, featuring an examination of potential criteria for assessing alternative instruments, with focus on cost-effectiveness. The theoretical foundations and experiential highlights of individual instruments are reviewed, including conventional command-and-control mechanisms and market-based instruments.

Keywords: environmental economics, efficiency, cost-effectiveness, benefit-cost analysis, market-based instruments, tradeable permits, pollution taxes

JEL Classification: K32, Q28, Q38, Q48

Suggested Citation

Stavins, Robert N., Environmental Economics. New Palgrave Dictionary of Economics and the Law, 2nd Edition. Available at SSRN: https://ssrn.com/abstract=637669

Robert N. Stavins (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

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