Trading Programs for Environmental Management: Reflections on the Air and Water Experiences

Leonard Shabman, Kurt Stephenson and William Shobe

No 2002-01, Working Papers from Center for Economic and Policy Studies

Abstract: Emission and effluent trading programs are increasingly being advocated for the nation’s air and water quality programs. However important distinctions must be drawn between credit and allowance trading, based on how much decision-making authority is transferred from regulators to dischargers. Credit trading programs are extensions of command-and-control regulation. Allowance trading programs, like markets, decentralize decisions on the means to control discharges and the location of that control. A review of existing trading programs finds allowance trading programs stimulate more aggressive pollution prevention behavior and result in lower compliance costs than credit trading.

Keywords: emission trading; environmental policy (search for similar items in EconPapers)
Pages: 25 pages
Date: 2002-01-05
Note: Paper published as: Shabman, Leonare, Kurt Stephenson, and William Shobe. “Trading Programs for Environmental Management: Reflections on the Air and Water Experiences.†Environmental Practice 4, no. 3 (September 2002): 153-162.
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