Frontiers of Environmental Economics

Frontiers of Environmental Economics

Edited by Henk Folmer, H. Landis Gabel, Shelby Gerking and Adam Rose

Top European and American scholars contribute to this cutting-edge volume on little-researched areas of environmental and resource economics. Topics include spatial economics, poverty and development, experimental economics, large-scale risk and its management, organizational economics, technological innovation and diffusion and many more.

Chapter 4: Empowering the community: information strategies for pollution control

Tom Tietenberg and David Wheeler

Subjects: economics and finance, environmental economics, environment, environmental economics

Extract

Tom Tietenberg and David Wheeler INTRODUCTION The Demand for Disclosure Strategies The first phase of pollution control involved applying traditional legal remedies such as emissions standards. Over time, however, it became clear that these traditional regulatory approaches to pollution control were excessively costly in some circumstances (Tietenberg, 1985) and incapable of achieving the stipulated goals in others (Tietenberg, 1995). Failures have been especially common in developing countries, where legal and regulatory institutions are often weak (Afsah and Laplante, 1996a). In response to these deficiencies the second phase of pollution control focused on market-based approaches such as tradable permits, emission charges, deposit-refunds and performance bonds (Hahn, 1989; OECD, 1989; Tietenberg, 1990; OECD, 1994, 1995). In some instances they have substituted for traditional remedies, but in most cases they have complemented them. In the OECD and Eastern Europe, these approaches have added both flexibility and improved cost-effectiveness to pollution control policy. Pollution charges have also contributed to improved environmental performance in developing Asia and Latin America, with particularly noteworthy examples in China (Wang and Wheeler, 1996), Malaysia (Vincent, 1993) and Colombia (Arbeláez, 1998). Even the addition of market-based approaches, however, has not fully solved the problem of pollution regulation. In the industrialized countries the system remains overburdened by the sheer number of substances to be controlled. Neither staffs nor budgets are adequate for the task of regulating all of the potentially harmful substances that are emitted by firms and households. In many developing countries, these difficulties are compounded by...

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