Stavins, Robert N. “Transaction Costs and Markets for Pollution Control.” Resources (1995). transaction_costs.resources1995.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.



Stavins, Robert N. “The Challenge of Going Green: A Perspective on Environmental Regulation and Competitiveness.” Harvard Business Review (1994): 38–39. challengeofgoinggreen.hbr_.1994.pdf


Lee, Henry, Richard G Newell, and Robert N Stavins. “Developments at the Interface of U.S. Energy and Environmental Policy.” In Energy and the Environment: Evolving Challenges and Opportunities. Cambridge, Massachusetts: Harvard International Energy Studies, 1994. developments_at_the_interface_of_us_energy_and_env_policy.pdf


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.



Stavins, Robert N, and Robert W Hahn. “Economic Incentives for Environmental Protection.” In McGraw-Hill Encyclopedia of Economics, 321–324. New York: McGraw-Hill, Inc. 1993. economic_incentives_for_env_protection.mcgrawhill.1993.pdf


Stavins, Robert N. “Green Taxes Would Reduce Pollution and Support Economic Growth.” Governing (1993): 69–70. yes_green_taxes.pdf


Stavins, Robert N, and T Grumbly. “The Greening of the Market.” In Mandate for Change, edited by Will Marshall and Martin Schram, 197–216. New York: Berkley Book, 1993. greening_of_the_market.making_the_polluter_pay.1993.pdf


Stavins, Robert N. “Market Forces Can Help Lower Waste Volumes.” Forum for Applied Research and Public Policy 8 (1993): 6–15. market_forces_can_help_lower_waste.pdf


Stavins, Robert N. “New Approaches to Environmental Cleanup.” The Quill 81 (1993): 35–38. new_approaches_to_environmental_cleamup.facs_.1993.pdf


Stavins, Robert N. “New, Cost-Conscious Environmentalism: Challenge is to 'Harness Power of Markets'.” Roll Call 38 (1993): 24–25. new_cost_conscious.pdf


Stavins, Robert N. “A Skeptic's View: There's No Free Lunch.” The World Paper (1993). world_paper_november_1993.pdf


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 Robert W Hahn. “Economic Instruments for Environmental Policy: Theory and Applications in the United States.” Innovazieone e Materie Prime (1992): 66–79. italian.economic_instruments_for_environmental_policy.1992.pdf


Stavins, Robert N, and Bradley W Whitehead. “The Greening of Adam Smith.” The New Democrat (1992): 15–17. greening_of_adam_smith.new_democrat.1992.pdf