Articles in Journals

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.



Stavins, Robert N. “Review of Valuing Climate Change by Samuel Fankhauser.” Journal of Economic Literature 34 (1996): 1999–2000. review_of_valuing_climate_change.pdf


Arrow, Kenneth J, Maureen L Cropper, George C Eads, Robert W Hahn, Lester B Lave, Roger G Noll, Paul R Portney, et al.Is There a Role for Benefit-Cost Analysis in Environmental, Health, and Safety Regulation?New Series 272 (1996): 221–222. Publisher's Version is_there_a_role_for_benefitcost_analysis.pdf


Jaffe, Adam B, and Robert N Stavins. “Dynamic Incentives of Environmental Regulations: The Effects of Alternative Policy Instruments on Technology Diffusion.” Journal of Environmental Economics and Management 29 (1995): 43–63. Publisher's Version dynamic_incentives_jeem.pdf


Jaffe, Adam B, Steven R Peterson, Paul R Portney, and Robert N Stavins. “Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?Journal of Economic Literature 33 (1995): 132–163. Publisher's Version env.regulationand.pdf


Stavins, Robert N. “Transaction Costs and Tradeable Permits.” Journal of Environmental Economics and Management 29 (1995): 133–148. Publisher's VersionAbstract

Tradeable-permit systems are at the center of current interest and activity in market-based reforms of environmental policy, because these systems can offer significant advantages over conventional approaches to pollution control. Unfortunately, claims made for their relative cost-effectiveness have often been exaggerated. Transaction costs, which may be significant in these markets, reduce trading levels and increase abatement costs. In some cases, equilibrium permit allocations and hence aggregate control costs are sensitive to initial permit distributions, providing an efficiency justification for politicians′ typical focus on initial allocations.



Jaffe, Adam B, and Robert N Stavins. “The Energy Paradox and the Diffusion of Conservation Technology.” Resource and Energy Economics 16 (1994): 91–122. Publisher's VersionAbstract

We develop a framework for thinking about the 'paradox' of very gradual diffusion of apparently cost-effective energy-conservation technologies. Our analysis provides some keys to understanding why this technology-diffusion process i.s gradual, and focuses attention on the factors that cause this to be the case, including those associated with potential market failures - information problems, principal/agent slippage, and unobserved costs - and those explanations that do not represent market failures - private information costs, high discount rates, and heterogeneity among potential adopters. Additionally, our analysis indicates how alternative policy instruments - both economic incentives and direct regulations can hasten the diffusion of energy-conserving technologies.



Jaffe, Adam B, and Robert N Stavins. “The Energy-Efficiency Gap: What Does It Mean?Energy Policy 22 (1994): 804–810. Publisher's VersionAbstract

As renewed attention has been given by policy makers to energy conservation issues, it has frequently been asserted that an energy-efficiency gap exists between actual and optimal energy use. The critical questions is how to define the optimal level of energy efficiency. This paper seeks to disentangle some confusing strands of argument that are frequently brought to bear on this question, by identifying the major conceptual issues that determine the set of feasible answers. We identify five separate and distinct notions of optimality: the economists' economic potential, the technologists' economic potential, hypothetical potential, the narrow social optimum and the true social optimum. Each of these has associated with it a corresponding definition of the energy-efficiency gap. Our analysis demonstrates that necessary preconditions for identifying the right measure of the energy-efficiency gap include understanding and disentangling market failure and non-market failure explanations for the gradual diffusion of energy-efficient technologies.



Jaffe, Adam B, and Robert N Stavins. “Energy-Efficiency Investments and Public Policy.” The Energy Journal 15 (1994): 43–65. Publisher's VersionAbstract

Concern about carbon dioxide as a greenhouse gas has focused renewed attention on energy conservation because fossil fuel combustion is a major source of CO₂ emissions. Since it is generally acknowledged that energy use could be significantly reduced through broader adoption of existing technologies, policy makers need to know how effective various policy instruments might be in accelerating the diffusion of these technologies. We examine the factors that determine the rate of diffusion, focusing on (i) potential market failures: information problems, principal-agent slippage, and unobserved costs, and (ii) explanations that do not represent market failures: private information costs, high discount rates, and heterogeneity among potential adopters. Through a series of simulations we explore how alternative policy instruments—both economic incentives and more conventional, direct regulations—could hasten the diffusion of energy-conserving technologies.



Portney, Paul R, and Robert N Stavins. “Regulatory Review of Environmental Policy: The Potential Role of Health-Health Analysis.” Journal of Risk and Uncertainty (1994): 111–122. Publisher's VersionAbstract

Health-health analysis (HHA) posits a seemingly unassailable criterion for regulatory assessment: policies intended to protect human health ought to exhibit positive health benefits. Despite the apparent logic of this criterion, it is important to ask whether it would aid in the quest for better public policies. In the context of environmental issues, we find that HHA can be useful by reminding us that it is the net health impact of a proposed regulation that can be important. However, we also find that in most applications the health impacts of regulatory compliance costs are unlikely to be significant. Conventional benefit-cost analysis ought to remain the principal tool of economic assessment of environmental laws and regulations.



Nordhaus, William D, Robert N Stavins, and Martin L Weitzman. “Comments on 'Lethal Model 2: The Limits to Growth Revisited' by William Nordhaus.” Brookings Papers on Economic Activity 1992 (1992): 44–50. Publisher's Version comments_onlethalmodel2.brookings.pdf


Stavins, Robert N, and Bradley W Whitehead. “Dealing with Pollution: Market-Based Incentives for Environmental Protection.” Environment 34 (1992): 7–11, 29–42. Publisher's VersionAbstract

A quest for innovative environmental policy instruments and a need for policies that harness rather than obstruct market forces has led to "pollution reduction credits" outlined in the 1990 Clean Air Act Amendments. Incentives and management of various pollutants are discussed.



Hahn, Robert W, and Robert N Stavins. “Economic Incentives for Environmental Protection: Integrating Theory and Practice.” The American Economic Review 82 (1992): 464–468. Publisher's Version incentives_envprotection_aer1992.pdf


Stavins, Robert N, and Bradley W Whitehead. “Pollution Charges for Environmental Protection: A Policy Link Between Energy and Environment.” Annual Review of Energy and the Environment 17 (1992): 187–210. Publisher's Version pollution_charges.pdf


Hahn, Robert W, and Robert N Stavins. “Incentive-Based Environmental Regulation: A New Era from an Old Idea.” Ecology Law Quarterly 18 (1991): 1–42. Publisher's Version incentive-based_environmental_regulation.pdf


Stavins, Robert N. “Alternative Renewable Resource Strategies: A Simulation of Optimal Use.” Journal of Environmental Economics and Management 19 (1990): 143–159. Publisher's VersionAbstract

The depletion of forested wetlands is a pressing environmental concern, but has wetland depletion and conversion to agricultural cropland been excessive? A dynamic analysis of resource exploitation in the presence of environmental consequences is required. The structure and parameters of a model of socially optimal wetland use are found to bear a well-defined relationship to those which emerge from a private-market model of wetland exploitation, providing a basis for internalizing environmental externalities and for identifying optimal resource-exploitation strategies. Empirical analysis focuses on the area of severest wetland losses in the United States, the Lower Mississippi Alluvial Plain.



Stavins, Robert N, and Adam B Jaffe. “Unintended Impacts of Public Investments on Private Decisions: The Depletion of Forested Wetlands.” The American Economic Review 80 (1990): 337–352. Publisher's VersionAbstract

By affecting relative economic returns, public infrastructure investments can induce major changes in private land use. We find that 30 percent of forested wetland depletion in the Mississippi Valley has resulted from private decisions induced by federal flood-control projects, despite explicit federal policy to preserve wetlands. Our model aggregates individual land-use decisions using a parametric distribution of unobserved land quality; dynamic simulations are used to quantify the impacts on wetlands of federal projects and other factors.