Academic journal article Duke Environmental Law & Policy Forum

A Grateful Response to Comments on Framing Environmental Policy Instrument Choice

Academic journal article Duke Environmental Law & Policy Forum

A Grateful Response to Comments on Framing Environmental Policy Instrument Choice

Article excerpt

I. INTRODUCTION

It is a rare pleasure to have the benefit of thoughtful comments from so many outstanding colleagues. I am glad that the article, Framing Environmental Policy Instrument Choice, was sufficiently stimulating to warrant such careful attention and comment.

The commentators found several areas in which the new framework and its explication introduced new and useful--or at least thought-provoking--ideas. I am grateful for the positive comments that reinforce the contributions of the article, including those recognizing that the framework provides:

* a taxonomy of instruments that recognizes a greater breadth of policy instruments(1) than most studies and provides insight into the relation among the instruments;(2)

* a means to restructure the evaluation criteria that are commonly applied to the instrument choice exercise into a cost-minimization approach;(3)

* recognition that cost-minimization requires looking beyond cost-of-compliance only,(4) expanding the cost factors to include public finance impacts.(5) and costs of implementation;(6)

* insight into the important dimensions of instrument choice, particularly the degree to which various instruments vest control over abatement production decisions;(7)

* explicit recognition of legal constraints on the range of instruments available to policymakers;(8)

* insight into the duality relation between subsidies (price-based payments) and contracts (quantity-based payments), a simple observation that had been previously overlooked;(9)

* a structure for understanding the significance of several important observations, including the "greater attractiveness of incentive-based instruments where the range of technology options is greatest;"(10) the potential desirability of paying interest on saved allowances;" the relation between measurement costs and private discretion;(12) and who bears the burden of residual pollution harm;(13)

* a means to use New Institutional Economics to provide new insights into the importance of credible commitment in environmental policy, and that the importance of credible commitment is not uniform across all instruments;(14) and

* an approach that could be extended to include natural resources management.(15)

If positive comments reinforce the contribution of the article, the criticisms help sharpen the analysis by focusing on potential improvements in the development of the framework. For those I am also grateful.

The critical comments fall into three categories: (1) those related to how the evaluation criteria were restructured as a constrained cost-minimization approach; (2) those addressing the new taxonomy of policy instruments; and (3) criticisms of the overall framework and its potential applicability. Some of the comments stem, no doubt, from my own imperfect exposition. In these areas we have no fundamental disagreements. Other comments bring new insight to the issue and will be incorporated in future work as the framework is refined and applied to specific problems. Finally, there are some comments that reflect a fundamental disagreement between my own approach and those of the commentators. While it is impossible to reply exhaustively to all the comments, I will attempt to respond to some of the suggestions and criticisms in this brief note, even recognizing that only over time will it be possible to fully address these issues. The next section of this response addresses comments falling in each of the three categories listed above and tries to address them where possible.

II. SUGGESTIONS AND CRITICISMS

A. The Constrained Cost-Minimization Criteria

Dr. Friedman, Ms. Downing, and Professor Gunn raise the provocative issue of whether it is appropriate to focus on cost-minimization as the driving force in evaluating the merits of environmental policy instruments.(16) They advance as an alternative approach a set of criteria arranged in three broad categories with nineteen separate factors to consider. …

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