EconPapers    
Economics at your fingertips  
 

Conservation Policies: Who Responds to Price and Who Responds to Prescription?

Casey Wichman (), Laura Taylor () and Roger von Haefen

Discussion Papers from Resources For the Future

Abstract: Although prescriptive policies are commonly employed by resource managers to encourage conservation, economists tend to advocate for pricing mechanisms on efficiency grounds. However, many environmental management contexts involve resources whose prices are regulated by utility commissions or federal oversight. As such, the use of pricing tools to encourage conservation is politically challenging. This is particularly true with water resource management. Efficiency would dictate that price should reflect long-run marginal cost of provision, including scarcity rents, which is typically greater than regulated market prices (Mansur and Olmstead 2012). As such, nonprice strategies, also referred to as prescriptive policies, have become popular demand management tools for water conservation during periods of drought when the short-run reliability of water resource systems is at risk. These strategies can take the form of restrictions on outdoor water use (Castledine et al. 2014; Renwick and Green 2000), information campaigns (Coleman 1999), social comparisons (Ferraro and Price 2013), or financial incentives for technology adoption (Bennear et al. 2013; Renwick and Archibald 1998). A noteworthy case where nonprice (and to a lesser degree, price) policies have been adopted to reduce water consumption is that of California, where Governor Jerry Brown recently issued an executive order that mandates a 25 percent reduction in urban potable water use to combat the ongoing statewide drought.

Keywords: water demand; nonprice policies; price regulation; conservation; drought (search for similar items in EconPapers)
JEL-codes: Q25 D12 H42 L51 L95 (search for similar items in EconPapers)
Date: 2016-03-16
New Economics Papers: this item is included in nep-agr, nep-env and nep-reg
References: Add references at CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
http://www.rff.org/research/publications/conservat ... esponds-prescription (application/pdf)

Related works:
Journal Article: Conservation policies: Who responds to price and who responds to prescription? (2016) Downloads
Working Paper: Conservation Policies: Who Responds to Price and Who Responds to Prescription? (2014) Downloads
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:rff:dpaper:dp-16-10

Access Statistics for this paper

More papers in Discussion Papers from Resources For the Future
Bibliographic data for series maintained by Webmaster ().

 
Page updated 2020-05-29
Handle: RePEc:rff:dpaper:dp-16-10