Environmental Policy Instruments

This lecture discusses the importance of environmental policy instruments in addressing harmful emissions, emphasizing the need for decentralized solutions. Various instruments are explored, including voluntary approaches, command-and-control regulations, and economic instruments like emissions taxes and tradable quotas. The lecture also delves into the criteria for comparing these instruments, such as environmental effectiveness, cost-efficiency, equity, and feasibility. Different approaches' impacts on emissions reduction, cost distribution, and fairness are analyzed, highlighting the challenges and benefits of each method. Equity considerations are crucial in evaluating the fairness of these instruments, especially in terms of burden distribution and economic impacts.