Publications by Year: 2003

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


Stavins, Robert N. “Experience with Market-Based Environmental Policy Instruments.” In Handbook of Environmental Economics, edited by Karl-Göran Mäler and Jeffrey Vincent, I:355–435. Amsterdam, Netherlands: Elsevier Science, 2003. handbook_chapter_on_mbi.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.



Stavins, Robert N. “Taking Fish to Market.” Forbes (2003): 40. Publisher's Version op-ed_in_forbes_on_fisheries_april_28_2003.pdf


Jaffe, Adam B, Richard G Newell, and Robert N Stavins. “Technological Change and the Environment.” In Handbook of Environmental Economics, Vol. 1, edited by K-G Mäler and JR Vincent, 1:461–516. Amsterdam and Boston: Elsevier Science B.V. 2003.Abstract

Environmental policy discussions increasingly focus on issues related to technological change. This is partly because the environmental consequences of social activity are frequently affected by the rate and direction of technological change, and partly because environmental policy interventions can themselves create constraints and incentives that have significant effects on the path of technological progress. This chapter summarizes current thinking on technological change in the broader economics literature, surveys the growing economic literature on the interaction between technology and the environment, and explores the normative implications of these analyses. We begin with a brief overview of the economics of technological change, and then examine theory and empirical evidence on invention, innovation, and diffusion and the related literature on the effects of environmental policy on the creation of new, environmentally friendly technology. We conclude with suggestions for further research on technological change and the environment.



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.