Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/72948
Authors: 
Schmalensee, Richard
Stavins, Robert N.
Year of Publication: 
2012
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 60.2012
Abstract: 
Two decades have passed since the Clean Air Act Amendments of 1990 launched a grand experiment in market-based environmental policy: the SO2 cap-and-trade system. That system performed well but created four striking ironies. First, by creating this system to reduce SO2 emissions to curb acid rain, the government did the right thing for the wrong reason. Second, a substantial source of this system's cost-effectiveness was an unanticipated consequence of earlier railroad deregulation. Third, it is ironic that cap-and-trade has come to be demonized by conservative politicians in recent years, since this market-based, cost-effective policy innovation was initially championed and implemented by Republican administrations. Fourth, court decisions and subsequent regulatory responses have led to the collapse of the SO2 market, demonstrating that what the government gives, the government can take away.
Subjects: 
Market-based Instruments
Cap-and-trade
Clean Air Act Amendments of 1990
Sulfur Dioxide
Acid Rain
JEL: 
Q54
Q58
Q40
Q48
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.