Friday, September 4, 2015

Standards and Incentives

As we move into discussion of correcting market failures, it’s important to have different perspectives and examples. Below are some links to excellent sources of information regarding standards (command and control) and incentive-based systems.



Here is some excellent reading from the US EPA on standards vs. incentives.

More detail is provided in this document (also from EPA. Note that Coase is covered on page 4-4). 

Here is a nice paper on the topic from the World Resources Institute.


Here is a link to a report on the use of economic incentives for pollution control in the US. You can use the "quick links" on the right to navigate the document.

Environmental Defense Fund has a short piece on how the use of incentives was a powerful solution to addressing acid rain.

The Environmental Literacy Council has a nice short article on standards vs. incentives.

Here's more from the World Bank.

Here is a short article on economic incentives for water quality management from the WHO.

Here is a great article by Robert Stavins on the topic.

Lots of great information in this report on Economic Incentives for Pollution Control from UNEP.



Finally, the other day in class I mentioned CAFE standards (which set minimum miles-per-gallon averages for automobiles)Here is a site with some of the basics from the USDOT.  More here (including history of CAFE standards) from the UCS.


What are some success stories where economic incentives have been used to reduce pollution?
If incentive-based systems are superior, why do we rely so heavily on standards?

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