Articles in Journals

Newell, Richard G, and Robert N Stavins. “Cost Heterogeneity and the Potential Savings from Market-Based Policies.” Journal of Regulatory Economics 23 (2003): 43–59. Publisher's VersionAbstract

Policy makers and analysts are often faced with situations where it is unclear whether market-based instruments hold real promise of reducing costs, relative to conventional uniform standards. We develop analytic expressions that can be employed with modest amounts of information to estimate the potential cost savings associated with market-based policies, with an application to the environmental policy realm. These simple formulae can identify instruments that merit more detailed investigation. We illustrate the use of these results with an application to nitrogen oxides control by electric utilities in the United States.



Snyder, Lori D, Nolan H Miller, and Robert N Stavins. “The Effects of Environmental Regulation on Technology Diffusion: The Case of Chlorine Manufacturing.” The American Economic Review 93 (2003): 431–435. Publisher's Version


Hahn, Robert W, Sheila M Olmstead, and Robert N Stavins. “Environmental Regulation in the 1990s: A Retrospective Analysis.” Harvard Environmental Law Review 27 (2003): 377–415. Publisher's Version hahn-olmstead-stavins_paper.pdf


Barrett, Scott, and Robert N Stavins. “Increasing Participation and Compliance in International Climate Change Agreements.” International Environmental Agreements: Politics, Law and Economics 3 (2003): 349–376. barrett_and_stavins_2003.pdf


Stavins, Robert N, Alexander F Wagner, and Gernot Wagner. “Interpreting Sustainability in Economic Terms: Dynamic Efficiency Plus Intergenerational Equity.” Economics Letters 79 (2003): 339–343. Publisher's VersionAbstract

Economists have confined the concept of ‘sustainability’ to intertemporal distributional equity. We propose a broader definition, combining dynamic efficiency and intergenerational equity, and relate it to two concepts from neoclassical economics: potential Pareto-improvements and inter-personal compensation.



Aldy, Joseph E, Scott Barrett, and Robert N Stavins. “Thirteen Plus One: A Comparison of Global Climate Policy Architectures.” Climate Policy 3 (2003): 373–397.Abstract

We critically review the Kyoto Protocol and thirteen alternative policy architectures for addressing the threat of global climate change. We employ six criteria to evaluate the policy proposals: environmental outcome, dynamic efficiency, cost-effectiveness, equity, flexibility in the presence of new information, and incentives for participation and compliance. The Kyoto Protocol does not fare well on a number of criteria, but none of the alternative proposals fare well along all six dimensions. We identify several major themes among the alternative proposals: Kyoto is “too little, too fast”; developing countries (DCs) should play a more substantial role and receive incentives to participate; implementation should focus on market-based approaches, especially those with price mechanisms; and participation and compliance incentives are inadequately addressed by most proposals. Our investigation reveals tensions among several of the evaluative criteria, such as between environmental outcome and efficiency, and between cost-effectiveness and incentives for participation and compliance.



Goulder, Lawrence H, and Robert N Stavins. “Discounting: An eye on the future.” Nature 419 (2002): 673–674. Publisher's VersionAbstract

Nature is the international weekly journal of science: a magazine style journal that publishes full-length research papers in all disciplines of science, as well as News and Views, reviews, news, features, commentaries, web focuses and more, covering all branches of science and how science impacts upon all aspects of society and life.



Plantinga, Andrew J, Ruben N Lubowski, and Robert N Stavins. “The Effects of Potential Land Development on Agricultural Land Prices.” Journal of Urban Economics 52 (2002): 561–581. Publisher's VersionAbstract

We conduct a national-scale analysis of the determinants of agricultural land values. The theoretical basis for the study is a spatial city model with stochastic returns to future land development. The empirical model of agricultural land prices is estimated with a cross-section on approximately three thousand counties in the contiguous US. The results provide evidence that option values associated with irreversible and uncertain land development are capitalized into current farmland values. For each county, we decompose the current agricultural land value into components measuring rents from agricultural production and rents from future land development.



Jaffe, Adam B, Richard G Newell, and Robert N Stavins. “Environmental Policy and Technological Change.” Environmental and Resource Economics 22 (2002): 41–70. Publisher's VersionAbstract

The relationship between technological changeand environmental policy has receivedincreasing attention from scholars and policymakers alike over the past ten years. This ispartly because the environmental impacts ofsocial activity are significantly affected bytechnological change, and partly becauseenvironmental policy interventions themselvescreate new constraints and incentives thataffect the process of technologicaldevelopments. Our central purpose in thisarticle is to provide environmental economistswith a useful guide to research ontechnological change and the analytical toolsthat can be used to explore further theinteraction between technology and theenvironment. In Part 1 of the article, weprovide an overview of analytical frameworksfor investigating the economics oftechnological change, highlighting key issuesfor the researcher. In Part 2, we turn ourattention to theoretical analysis of theeffects of environmental policy ontechnological change, and in Part 3, we focuson issues related to the empirical analysis oftechnology innovation and diffusion. Finally,we conclude in Part 4 with some additionalsuggestions for research.



Newell, Richard G, and Robert N Stavins. “Climate Change and Forest Sinks: Factors Affecting the Costs of Carbon Sequestration.” Journal of Environmental Economics and Management 40 (2000): 211–235. Publisher's VersionAbstract

The possibility of encouraging the growth of forests as a means of sequestering carbon dioxide has received considerable attention, partly because of evidence that this can be a relatively inexpensive means of combating climate change. But how sensitive are such estimates to specific conditions? We examine the sensitivity of carbon sequestration costs to changes in critical factors, including the nature of management and deforestation regimes, silvicultural species, relative prices, and discount rates.



Stavins, Robert N. “The Costs of Carbon Sequestration: A Revealed-Preference Approach.” The American Economic Review 89 (1999): 994–1009. Publisher's Version cost_of_carbon_sequestration.pdf


Newell, Richard G, Adam B Jaffe, and Robert N Stavins. “The Induced Innovation Hypothesis and Energy-Saving Technological Change.” The Quarterly Journal of Economics 114 (1999): 941 –975. Publisher's VersionAbstract

We develop a methodology for testing Hicks's induced innovation hypothesis by estimating a product-characteristics model of energy-using consumer durables, augmenting the hypothesis to allow for the influence of government regulations. For the products we explored, the evidence suggests that (i) the rate of overall innovation was independent of energy prices and regulations; (ii) the direction of innovation was responsive to energy price changes for some products but not for others; (iii) energy price changes induced changes in the subset of technically feasible models that were offered for sale; (iv) this responsiveness increased substantially during the period after energy-efficiency product labeling was required; and (v) nonetheless, a sizable portion of efficiency improvements were autonomous.



Keohane, Nathaniel, R Revesz, and Robert N Stavins. “The Choice of Regulatory Instruments in Environmental Policy.” Harvard Environmental Law Review 22 (1998): 313–367. the_choice_of_regulatory.pdf


Fullerton, Don, and Robert Stavins. “How Economists See the Environment.” Nature 395 (1998): 433–434. Publisher's VersionAbstract

Economists and ecologists misunderstand each other about the environment. Improving interdisciplinary communication should enable natural scientists to take economic analysis and prescriptions more seriously.



Stavins, Robert N. “A Methodological Investigation of the Costs of Carbon Sequestration.” Journal of Applied Economics 1 (1998): 231–277. Publisher's Version a_methodological_investigation.pdf


Stavins, Robert N. “Significant Issues for Environmental Policy and Air Regulation for the Next Decade.” Environmental Science and Policy 1 (1998): 143–147. significant_issues.pdf


Stavins, Robert N. “What Can We Learn from the Grand Policy Experiment? Lessons from so2 Allowance Trading.” Journal of Economic Perspectives 12 (1998): 69–88. Publisher's Version what_can_we_learn_from_the_grand_policy_experiment.pdf


Hockenstein, Jeremy B, Robert N Stavins, and Bradley W Whitehead. “Crafting the Next Generation of Market-Based Environmental Tools.” Environment: Science and Policy for Sustainable Development 39 (1997): 12–33. Publisher's Version crafting_the_next_generation.pdf


Stavins, Robert N. “Policy Instruments for Climate Change: How Can National Governments Address a Global Problem.” University of Chicago Legal Forum 1997 (1997): 293–329. Publisher's Version policy_instruments_for_climate_change.pdf


Stavins, Robert N. “Correlated Uncertainty and Policy Instrument Choice.” Journal of Environmental Economics and Management 30 (1996): 218–232. Publisher's VersionAbstract

For two decades, environmental economists have generally maintained that benefit uncertainty is irrelevant for choosing between price and quantity instruments, but that cost uncertainty matters, with the identity of the efficient instrument depending upon the relative slopes of the marginal benefit and cost functions. But, in the presence of simultaneous, correlated uncertainty, such policy instrument recommendations may be inappropriate. With plausible values of relevant parameters, the conventional identification of a price instrument will be reversed, to favor instead a quantity instrument. The opposite reversal—from the choice of a quantity instrument to a price instrument—seems less likely to occur.