Articles in Journals

Jaffe, Judson, and Robert N Stavins. “On the Value of Formal Assessment of Uncertainty in Regulatory Analysis.” Regulation & Governance 1 (2007): 154–171.Abstract

The US Office of Management and Budget introduced in 2003 a new requirement for the treatment of uncertainty in Regulatory Impact Analyses (RIAs) of proposed regulations, requiring agencies to carry out a formal quantitative uncertainty assessment regarding a regulation’s benefits and costs if either is expected to reach \$1 billion annually. Despite previous use in other contexts, such formal assessments of uncertainty have rarely been employed in RIAs or other regulatory analyses. We describe how formal quantitative assessments of uncertainty – in particular, Monte Carlo analyses – can be conducted, we examine the challenges and limitations of such analyses in the context of RIAs, and we assess how the resulting information can affect the evaluation of regulations. For illustrative purposes, we compare Monte Carlo analysis with methods typically used in RIAs to evaluate uncertainty in the context of economic analyses carried out for the US Environmental Protection Agency’s Nonroad Diesel Rule, which became effective in 2004. [ABSTRACT FROM AUTHOR] Copyright of Regulation & Governance is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)



Olmstead, Sheila M, W Michael Hanemann, and Robert N Stavins. “Water Demand Under Alternative Price Structures.” Journal of Environmental Economics and Management 54 (2007): 181–198. Publisher's VersionAbstract

We estimate the price elasticity of water demand with household-level data, structurally modeling the piecewise-linear budget constraints imposed by increasing block pricing. We develop a mathematical expression for the unconditional price elasticity of demand under increasing block prices and compare conditional and unconditional elasticities analytically and empirically. We test the hypothesis that price elasticity may depend on price structure, beyond technical differences in elasticity concepts. Due to the possibility of endogenous utility price structure choice, observed differences in elasticity across price structures may be due either to a behavioral response to price structure, or to underlying heterogeneity among water utility service areas.



Anderson, Kym, V Ashenfelter, Victor Ginsburgh, and Robert N Stavins. “Editorial Welcome.” Journal of Wine Economics 1 (2006). Publisher's Version
Newell, Richard G, Adam B Jaffe, and Robert N Stavins. “The Effects of Economic and Policy Incentives on Carbon Mitigation Technologies.” Energy Economics 28 (2006): 563–578. Publisher's Version energy_economics_newell_jaffe_stavins.pdf


Stavins, Robert N. “Film Review: Alexander Payne, Sideways.” Journal of Wine Economics 1 (2006): 91–93. Publisher's Version sideways_review_jwe.pdf


Olmstead, Sheila M, and Robert N Stavins. “An International Policy Architecture for the Post-Kyoto Era.” American Economic Review 96 (2006): 35–38. olmstead_stavins_aer_2006.pdf


Lubowski, Ruben N, Andrew J Plantinga, and Robert N Stavins. “Land-Use Change and Carbon Sinks: Econometric Estimation of the Carbon Sequestration Supply Function.” Journal of Environmental Economics and Management 51 (2006): 135–152. Publisher's VersionAbstract

If the United States chooses to implement a greenhouse gas reduction program, it would be necessary to decide whether to include carbon sequestration policies—such as those that promote forestation and discourage deforestation—as part of the domestic portfolio of compliance activities. We investigate the cost of forest-based carbon sequestration by analyzing econometrically micro-data on revealed landowner preferences, modeling six major private land uses in a comprehensive analysis of the contiguous United States. The econometric estimates are used to simulate landowner responses to sequestration policies. We treat key commodity prices as endogenous and predict carbon storage changes with a carbon sink model. Our estimated sequestration costs exceed those from previous engineering cost analyses and sectoral optimization models. Our estimated sequestration supply function is similar to the carbon abatement supply function from energy-based analyses, suggesting that forest-based carbon sequestration merits consideration in a cost-effective portfolio of domestic US climate change strategies.



Stavins, Robert N. “Vintage-Differentiated Environmental Regulation.” Stanford Environmental Law Journal 25 (2006): 29–63. Publisher's Version vintage_differentiated_regulation_by_stavins.pdf


Jaffe, Adam B, Richard G Newell, and Robert N Stavins. “A Tale of Two Market Failures: Technology and Environmental Policy.” Technological Change and the Environment Technological Change 54 (2005): 164–174. Publisher's VersionAbstract

Market failures associated with environmental pollution interact with market failures associated with the innovation and diffusion of new technologies. These combined market failures provide a strong rationale for a portfolio of public policies that foster emissions reduction as well as the development and adoption of environmentally beneficial technology. Both theory and empirical evidence suggest that the rate and direction of technological advance is influenced by market and regulatory incentives, and can be cost-effectively harnessed through the use of economic-incentive based policy. In the presence of weak or nonexistent environmental policies, investments in the development and diffusion of new environmentally beneficial technologies are very likely to be less than would be socially desirable. Positive knowledge and adoption spillovers and information problems can further weaken innovation incentives. While environmental technology policy is fraught with difficulties, a long-term view suggests a strategy of experimenting with policy approaches and systematically evaluating their success.



Bennear, Lori S, Robert N Stavins, and Alexander F Wagner. “Using Revealed Preferences to Infer Environmental Benefits:Evidence from Recreational Fishing Licenses.” Journal of Regulatory Economics 28 (2005): 157–179. Publisher's VersionAbstract

We develop and apply a new method for estimating the economic benefits of an environmental amenity. The method is based upon the notion of estimating the derived demand for a privately traded option to utilize an open access good. In particular, the demand for state fishing licenses is used to infer the benefits of recreational fishing. Using panel data on state fishing license sales and prices for the continental United States over a 15-year period, combined with data on substitute prices and demographic variables, a license demand function is estimated with instrumental variable procedures to allow for the potential endogeneity of administered prices. The econometric results lead to estimates of the benefits of a fishing license, and subsequently to the expected benefits of a recreational fishing day. In contrast with previous studies, which have utilized travel cost or hypothetical market methods, our approach provides estimates that are directly comparable across geographic areas. Our findings show substantial variation in the value of a recreational fishing day across geographic areas in the United States. This suggests that current practice of using benefits estimates from one part of the country in national or regional analyses may lead to substantial bias in benefits estimates.



Stavins, Robert N. “Forging A More Effective: Global Climate Treaty.” Environment: Science and Policy for Sustainable Development 46 (2004): 22–30. Publisher's Version environment_magazine_article_on_3-part.pdf


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.