Regulators are increasingly pursuing their policy objectives by creating markets. To create a policy market, regulators require firms to procure a product that is socially useful but that confers little direct private benefit to the acquiring party. Examples of policy markets include pollutant emissions trading programs, renewable energy credit markets, and electricity capacity markets. Existing scholarship has tended to analyze policy markets simply as market-based regulation. Although not inaccurate, such inquiries are necessarily incomplete because they do not focus on the distinctive traits of policy markets. Policy markets are neither typical regulations nor typical markets. Concentrating on policy markets as a distinctive type of market brings to light common characteristics of such markets, which in turn generates insights into how they can be used more effectively to implement policy. In particular, this Article focuses on a recurring fundamental challenge in policy market design: managing complexity. Typical markets manage complexity through market forces. As a regulatory creation, however, policy markets require regulators to manage their complexity. This poses what we call the complexity dilemma, which requires regulators to balance strong pressures both toward and away from complexity. The central argument of this Article is that although policy markets are an important part of a regulator’s toolkit, they are also subject to complexity that limits their usefulness. Understanding the complexity dilemma and its crucial role in policy market design forms an essential step toward progress in improving the design and function of these markets.
The National Trust in England, Wales, and Northern Ireland is one of the oldest and most revered private land conservation organizations in the world. While the private land conservation movements in the United States and the United Kingdom began at a similar time and with similar tools, conservation attitudes and methods in the two countries diverged. Today, the National Trust dominates land conservation in the U.K. while the strength of the U.S. movement is the energy of over 1,500 smaller organizations operating at different scales across the country. Despite the differences, this project looks to the National Trust in England and concludes that three elements of the National Trust’s experience provide important insights for U.S. land trusts rethinking their programs as political and environmental change engulfs the planet. First, the National Trust has gone through several iterations in its understanding of general public benefit and public access to protected properties in a way that most U.S. land trusts have yet to do. Second, National Trust experience suggests that U.S. land trusts could become more engaged in land-use regulations rather than presenting themselves primarily as an alternative (private, compensated, voluntary) thereto. Finally, the National Trust’s approaches to balancing agricultural productivity with sustainability provide useful models to study and emulate in the management of working landscapes. Many of the lessons learned by the National Trust could enrich private land conservation in the United States in an era of government withdrawal from environmental protection and growing impacts of climate change.