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Efficient Pollution Regulation: Getting the Prices Right: Reply

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  • Nicholas Z. Muller
  • Robert Mendelsohn

Abstract

Fraas and Lutter raise two important points in their comment on Muller and Mendelsohn (2009): How to design policies for sources that yield negative marginal damages? How does statistical uncertainty in the marginal damages affect the trading ratios across emitters? We address both issues in this response. (JEL H53, Q53, Q58)

Suggested Citation

  • Nicholas Z. Muller & Robert Mendelsohn, 2012. "Efficient Pollution Regulation: Getting the Prices Right: Reply," American Economic Review, American Economic Association, vol. 102(1), pages 608-612, February.
    • Handle: RePEc:aea:aecrev:v:102:y:2012:i:1:p:608-12
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    References listed on IDEAS

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    1. Spencer Banzhaf, H. & Burtraw, Dallas & Palmer, Karen, 2004. "Efficient emission fees in the US electricity sector," Resource and Energy Economics, Elsevier, vol. 26(3), pages 317-341, September.
    2. Burrows, Paul, 1986. "Nonconvexity induced by external costs on production: Theoretical curio or policy dilemma?," Journal of Environmental Economics and Management, Elsevier, vol. 13(2), pages 101-128, June.
    3. Repetto, Robert, 1987. "The policy implications of non-convex environmental damages: A smog control case study," Journal of Environmental Economics and Management, Elsevier, vol. 14(1), pages 13-29, March.
    4. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249, September.
    5. Muller Nicholas Z, 2011. "Linking Policy to Statistical Uncertainty in Air Pollution Damages," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-29, June.
    6. Art Fraas & Randall Lutter, 2012. "Efficient Pollution Regulation: Getting the Prices Right: Comment," American Economic Review, American Economic Association, vol. 102(1), pages 602-607, February.
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    Citations

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    Cited by:

    1. Hollingsworth, Alex J. & Konisky, David M. & Zirogiannis, Nikolaos, 2021. "The health consequences of excess emissions: Evidence from Texas," Journal of Environmental Economics and Management, Elsevier, vol. 108(C).
    2. Nicholas Z. Muller & Robert Mendelsohn, 2012. "Efficient Pollution Regulation: Getting the Prices Right: Corrigendum (Mortality Rate Update)," American Economic Review, American Economic Association, vol. 102(1), pages 613-616, February.
    3. Robert N. Stavins, 2011. "The Problem of the Commons: Still Unsettled after 100 Years," American Economic Review, American Economic Association, vol. 101(1), pages 81-108, February.
    4. Joseph S Shapiro, 2021. "The Environmental Bias of Trade Policy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(2), pages 831-886.
    5. Parry, Ian, 2015. "Designing Fiscal Policy to Address the External Costs of Energy," International Review of Environmental and Resource Economics, now publishers, vol. 8(1), pages 1-56, May.
    6. Lazarus, Elias & Brown, Clair, 2022. "Improving the genuine progress indicator to measure comparable net welfare: U.S. and California, 1995–2017," Ecological Economics, Elsevier, vol. 202(C).
    7. Richard Schmalensee & Robert N. Stavins, 2013. "The SO 2 Allowance Trading System: The Ironic History of a Grand Policy Experiment," Journal of Economic Perspectives, American Economic Association, vol. 27(1), pages 103-122, Winter.
    8. Ian W.H. Parry & Mr. John Norregaard & Mr. Dirk Heine, 2012. "Environmental Tax Reform: Principles from Theory and Practice to Date," IMF Working Papers 2012/180, International Monetary Fund.

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    More about this item

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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