1. The least-cost theorems in environmental economics: A third way between idealized Pareto optimality and traditional regulation
- Author
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Berta, Nathalie, Recherches en Économie Gestion AgroRessources Durabilité Santé- EA 6292 (REGARDS), Maison des Sciences Humaines de Champagne-Ardenne (MSH-URCA), Université de Reims Champagne-Ardenne (URCA)-Université de Reims Champagne-Ardenne (URCA)-Université de Reims Champagne-Ardenne (URCA), Nathalie Berta, Romain Debref, Franck-Dominique Vivien (REGARDS, Reims University), Cahiers d'économie politique/Papers in political economy, Université de Reims Champagne-Ardenne (URCA)-Maison des Sciences Humaines de Champagne-Ardenne (MSH-URCA), Université de Reims Champagne-Ardenne (URCA)-Université de Reims Champagne-Ardenne (URCA), CIRED, CNRS, ESHET, Berta, Nathalie, and Université de Reims, REGARDS
- Subjects
[SDE] Environmental Sciences ,John Dales ,externality ,cost efficiency ,Pigovian taxation ,market for righs ,Pigovian tax ,[SHS.ECO]Humanities and Social Sciences/Economics and Finance ,environmental externality ,[SHS]Humanities and Social Sciences ,pollution control ,[SDE]Environmental Sciences ,[SHS] Humanities and Social Sciences ,[SHS.ECO] Humanities and Social Sciences/Economics and Finance ,market for rights - Abstract
International audience; In the late 1960s, new environmental policies emerged that attempted to reach predetermined emissions standards in a cost effective way: i.e., the ‘standard-and-tax’ approach (Baumol and Oates [1971]) and the market system approach (Dales [1968]). Although they belong to different traditions, namely, Pigovian versus Coasean, and are frequently contrasted in the literature today, these least-cost solutions in fact emerged at the same time and for the same reasons. They both addressed the same dual issue: first, they tried to promote incentives-based policies as opposed to traditional standards that they considered to be inefficient; and at the same time, they attempted to find alternatives to the Pigovian tax, which is optimal but that they considered to be unworkable. So, more broadly, they emerged as a kind of compromise between the direct controls favored by regulators at that time and the idealized Pareto optimal policies.
- Published
- 2019