Design of Environmental Policy Instruments

Policy design is at the heart of environmental economics and is my favourite part. First because this is where we can make a difference: We actually try to fix things and make them better. Secondly it is an interesting intellectual exercise: We have to realize that governments do not just decide our emissions, they just set rules and the rules we need will be different depending on whether consumers and producers are rational or addicted, forward-looking or myopic, selfish or altruistic, whether they have the power to be strategic and many other conditions. Policies to stop smoke will have to be quite different for power plants, forest fires or teenage smokers…!

Here is a selection of papers on policy design: