TY  - JOUR
AU  - Williams, Roberton C, III
TI  - Growing State-Federal Conflicts in Environmental Policy: The Role of Market-Based Regulation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16184
PY  - 2010
Y2  - July 2010
DO  - 10.3386/w16184
UR  - http://www.nber.org/papers/w16184
L1  - http://www.nber.org/papers/w16184.pdf
N1  - Author contact info:
Roberton C. Williams III
Department of Agricultural and Resource Economics
University of Maryland
Symons Hall
College Park, MD 20742
Tel: 301-405-1284
Fax: 301-314-9091
E-Mail: roberton@umd.edu
M1  - published as Roberton C. Williams III. "Growing State-Federal Conflicts in Environmental Policy: The Role of Market-based Regulation," in Julie Cullen and Roger Gordon, organizers, "Fiscal Federalism" Journal of Public Economics 96(11-12) (Elsevier) (2012)

AB  - In recent years, cases in which state governments chose to override federal environmental regulation with tighter regulations of their own have become increasingly common, even for pollutants that have substantial spillovers across states.  This paper argues that this change arose at least in part because of a shift in the type of regulation used at the federal level, from command-and-control regulation toward more incentive-based regulation.  Under an incentive-based federal regulation, a state imposing a tighter regulation will bear only part of the additional cost, and thus has more incentive to tighten regulation than it does under federal command-and-control. This difference helps to explain observed patterns of regulation.  In addition, it has implications for the choice of regulatory instruments.  For a pollutant that causes both local and spillover damage, a federal pollution tax is likely to yield a more efficient outcome than federal command-and-control policy or a federal system of tradable permits.
ER  -