Local Solutions to Global Problems: Climate Change Policies and Regulatory Jurisdiction

James Bushnell, Carla Peterman and Catherine Wolfram

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: This article considers the efficacy of various types of environmental regulations when they are applied locally to pollutants, such as greenhouse gases, whose damages extend beyond the jurisdiction of the local regulator. While previous work has noted the possibility for leakage, whereby polluting sources move outside the jurisdiction of the regulation, we identify an additional problem that occurs when policies are targeted downstream, at consumers of goods whose production creates pollution. Specifically, we show how consumer-based policies can be circumvented by a simple reshuffling of who is buying from whom. We argue that the leakage problems are more pronounced with regulations that impose costs on firms than with subsidies that reward production of low-polluting goods. Reshuffling problems are more pronounced when the options for compliance are more flexible, such as with market-based regulations. We conclude that localities may be able to have the greatest impact on global pollutants when they enact relatively inflexible regulations such as efficiency standards or targeted subsidies.

JEL-codes: Q48 Q54 Q58 (search for similar items in EconPapers)
Date: 2008-07-01
References: Add references at CitEc
Citations: View citations in EconPapers (49)

Published in Review of Environmental Economics and Policy, Summer 2008, vol. 2 no. 2, pp. 175-193

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Local Solutions to Global Problems: Climate Change Policies and Regulatory Jurisdiction (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:13125

Access Statistics for this paper

More papers in Staff General Research Papers Archive from Iowa State University, Department of Economics Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070. Contact information at EDIRC.
Bibliographic data for series maintained by Curtis Balmer ().