About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

29 N.Y.U. Envt. L.J. 493 (2021)
Behaviorally Informed Mandates? Internalities, Externalities, and Fuel Economy Rules

handle is hein.journals/nyuev29 and id is 505 raw text is: BEHAVIORALLY INFORMED MANDATES? INTERNALITIES, EXTERNALITIES, AND FUEL ECONOMY RULES CASS R. SUNSTEIN* ABSTRACT It is standard to think that economic incentives are generally or always better than regulatory mandates. But in the face of behavioral market failures, that conclusion might not be so clear. Fuel economy and energy efficiency mandates are possible examples. Because such mandates might produce billions of dollars in annual consumer savings (as economic incentives do not), they might have very high net benefits, complicating the choice between such mandates and economic incentives (such as carbon taxes). Under plausible assumptions, fuel economy and energy efficiency standards might have higher net benefits than economic incentives, if and because they confer signicant benefits on consumers, in addition to reducing externalities. The net benefits of mandates that simultaneously reduce internalities and externalities might exceed the net benefits of incentives that reduce externalities alone, even if mandates turn out to be a highly inefficient way of reducing externalities. I. MARKET FAILURES, OLD AND NEW....................................................:..... 494 II. INTERNALITIES AND EXTERNALITIES..................... .......................... 496 III. THE CENTRAL CONUNDRUM AND THE ENERGY PARADOX................. 500 IV. MANDATES AND INTERNALITIES............................................................ 504 Robert Walmsley University Professor, Harvard University. This is an essay for a symposium at New York University School of Law, in honor of Richard B. Stewart. Dick launched my academic career and sparked so many of my interests; it is very hard to put my gratitude into words. Dick taught me .civil procedure and administrative law, and after my first year in law school, I was privileged to be his research assistant, among other things on an administrative law casebook of which I am now lucky enough to be a coauthor. I am so grateful to him for so many things-his immense intellectual integrity, his insistence on trying to. get things right, his curiosity, his commitment to both truth and human welfare, and his in- terdisciplinary approach, including.his belief that without some understanding of economics, political science, and philosophy, you can't do law right. This essay should be seen as an effort to engage with Dick's work on the use of economic incentives in regulatory policy and administrative law; despite the questions raised here, I believe that he is fundamentally correct in his general prescriptions. See generally Richard B. Stewart, Reconstitutive Law, 46 MD. L. REV. 86 (1986). 493 Imaged with Permission of N.Y.U. Environmental Law Journal

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most