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

6 Fordham Envtl. L.J. 51 (1994-1995)
Pollution Trading Permits as a Form of Market Socialism and the Search for a Real Market Solution to Environmental Pollution

handle is hein.journals/frdmev6 and id is 61 raw text is: POLLUTION TRADING PERMITS AS A FORM OF MARKET SOCIALISM AND THE SEARCH FOR A REAL MARKET SOLUTION TO ENVIRONMENTAL POLLUTION ROBERT W. MCGEE* WALTER E. BLOCK** INTRODUCTION T he concept of the marketable pollution permit (MPP)1 has be- come an increasingly popular topic of discussion for environmen- talists in recent years, although the idea has been in existence since at least 1968, when J.H. Dales published a book on the issue.2 This ap- proach was given added credibility when Congress enacted the Clean Air Act Amendments of 1990,3 which made the concept an official part of environmental regulatory policy. A typical solution in this area is for the government to mandate that a certain kind of pollutant in a specified geographic area be reduced by a defined target percent- age within a certain time period. Essentially, such nostrums are based on a centralized command system rather than the market place. Establishing a market in tradeable pollution permits triggers quasi market forces. This leads to a more efficient allocation of re- sources than traditional command and control alternatives and makes it possible to achieve the goal of reducing emissions at a lower cost. Firms that cannot achieve the targeted level can purchase a permit from the party whose reduction exceeds the mandated amount. As such, there is an incentive for each party to reduce pollution below the * Robert W. McGee is a professor at the W. Paul Stillman School of Business, Seton Hall University. ** Walter E. Block is a professor in the economics department of the College of the Holy Cross. The authors would like to thank Vivian Lugo and John Tortora for their research assistance. 1. This scheme also goes by the names tradeable emission rights (TERs), tradeable pollution rights (TPRs) and tradeable emission permits (TEPs). 2. JOHN H. DALES, POLLUTION, PROPERTY & PRICES (1968). Other treatises on this subject include: BUYING A BETrER ENVIRONMENT: COST-EFFECTIVE REGULA- TION THROUGH PERMIT TRADING (Erhard F. Joeres & Martin H. David eds., 1983); THOMAS H. TIETENBERG, EMISSIONS TRADING: AN EXERCISE IN REFORMING POLLU- TION POLICY (1985); Robert W. Hahn, Innovative Approaches for Revising the Clean Air Act, 28 NAT. RESOURCES J. 171 (1988). 3. Pub. L. No. 101-549, 104 Stat. 2399 (1990). These amendments modified the Clean Air Act of 1977, 42 U.S.C. §§ 7401-7642 (1988). Previous acts included the Air Pollution Control Act of 1955, Pub. L. No. 84-159, 69 Stat. 322 (1955); the Clean Air Act of 1963, Pub. L. No. 88-206, 77 Stat. 392 (1963); and the Clean Air Act Amend- ments of 1970, Pub. L. No. 91-604, 84 Stat. 1676 (1970), among others.

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