New Approaches on Energy and the Environment

CHAPTER

10

State Innovation for Environmental Improvements

Experimental Federalism

by Winston Harrington, Karen L. Palmer and Margaret Walls

One of the virtues of the U.S. federal system of government is the ability to allow for geographic differences in policies and experimentation across state lines. But not enough experimentation takes place, because its costs are borne locally while the benefits spread across the country. Mr. President, we urge you to use the power of the federal purse in a “policy auction”—a competition among states and localities for federal funds to implement creative new policies, ones that all other states could learn from and emulate. We particularly urge you to focus the auction on the use of economic incentive-based ...