Economics and the Environment, 10th Edition

PART IIIS GOVERNMENT UP TO THE JOB?

The first part of this book focused on an explicitly normative question: How much pollution is too much? How much conservation of natural capital do we need? We analyzed several possible answers to that question—efficiency, safety, and sustainability—from both ethical and practical points of view. Having set a goal, at least in our own minds, we can now consider how to get there. As it turns out, we have one primary vehicle: government. From Chapter 3, we know that private markets generate too much pollution from both efficiency and safety perspectives. Thus, it is up to government to devise policies that modify market behavior and reduce pollution.

Government has a variety of tools at its command to attack the pollution problem, ranging from regulations and bans to pollution taxes and marketable permit systems to subsidy policies and infrastructure and R&D investments. But, before discussing policy details, we first need to consider a more central question: Is government up to the job?

This part of the book provides an overview of governmental efforts to control pollution. This chapter begins by developing a theory of government action that highlights two primary issues: the information‐intensive nature of environmental regulation and the potential for political influence in the regulatory process. Until recently, industry and environmentalists battled over the introduction of new laws and regulations, in the latter case, using the inherent ...