Current Issue

  • Volume 29,
  • Number 1 -
  • Fall 2018


Defining the Legal and Policy Framework to Stop the Dumping of Environmentally Harmful Products
Stephen O. Andersen, Richard Ferris, Romina Picolotti, Durwood Zaelke, Suely Carvalho & Marco Gonzalez

Environmental dumping is a practice historically associated with the export of hazardous product waste from a developed country for irresponsible and often illegal disposal in a developing country. Now, with the industrialization and globalization of China and other developing countries, environmental dumping can involve both developing and developed countries as origin and destination. This dumping can be especially harmful to attempts to control under the Montreal Protocol ozone-depleting and climate-forcing chemical substances and/or products requiring unnecessarily high energy consumption. While developing country Parties to the Montreal Protocol are allowed to delay their phasedown of climate-forcing and ozone-depleting hydrofluorocarbons (HFCs) during a multi-year grace period, there are advantages to earlier implementation when superior alternatives are already available at reasonable costs, as is the case for many uses of HFCs today. Thus, developing countries can benefit under the Protocol from setting controls for environmental dumping. This article aims to give policymakers, especially those in developing countries, a legal and policy “toolkit” that can be used to stop unwanted environmental dumping. It includes an examination of the history of environmental dumping, illustration of such dumping in practice, a detailed explanation and examination of the legal and policy tools, and a summary of the consequences of environmental dumping.

Smart Instrument Mixes to Promote Green Building
Yayun Shen & Michael Faure

A smart mix of legal instruments is not new, but green building (GB) compliance is. As a way to environmental compliance in general, the mixing of instruments may also work to overcome the challenges facing GB compliance. The mix can be justified by the failings of government regulation, liability, and self-regulation. Therefore in theory, a smart mix of instruments makes sense, since each of the above instruments may be subject to imperfect information, private interests, the inaccuracy of measurement, and/or ineffectiveness. In practice, instrument mixes have been around in the U.S. GB laws. The theory and the U.S. case law indicate that, first, GB compliance may owe its survival to self-regulation in early times, but over time law and policy will play a big role. Second, in pursuit of GB compliance, governments can make the most of self-regulation by incorporating industry-based certifications into statutory mandates. Apart from the traditional carrots and sticks, governments eventually can enlist private information as behavioral interventions to encourage GB compliance.

Experience with Carbon Taxes and Greenhouse Gas Emissions Trading Systems
Erik Haites, Duan Maosheng, Kelly Sims Gallagher, Sharon Mascher, Easwaran Narassimhan, Kenneth R. Richards & Masayo Wakabayashi

Carbon taxes and emissions trading systems (ETSs) to limit emissions of greenhouse gases (GHGs) are increasingly common. At the end of 2015, 17 GHG ETSs were operational in 55 jurisdictions, and 18 jurisdictions collected at least one carbon tax. This paper assesses the performance of carbon taxes and ETSs with respect to environmental effectiveness (reduction of emissions regulated by the instrument), cost-effectiveness (marginal abatement cost), economic efficiency, public finance, and administrative issues.

Data on emissions subject to carbon taxes are rarely reported. We estimate the taxed emissions for 17 taxes in 12 jurisdictions from 1991 through the end of 2015. All 17 taxes have reduced emissions relative to business-as-usual. Six of the jurisdictions actually reduced emissions, although in at least three of those jurisdictions the reductions appear to be due to other policies. The small sizes of reduction in almost all 17 cases are partially due to the low tax rates; the modest and uncertain changes in tax rates over time; and the limited response of taxed sources, such as fossil fuels, to price changes.

Actual emissions declined for at least six of 10 ETSs. Other policies and developments, such as the 2009 recession, contributed to the reductions, but estimates of the share of the reduction attributable to the instrument are rare. All of the ETSs have accumulated banks of surplus allowances and most have implemented measures to reduce these banks. On average, the marginal cost of compliance is substantially lower for ETSs than carbon taxes.

ETS experience has been shared bilaterally and via dedicated institutions. As a result, most ETSs have increased the share of allowances auctioned; adopted declining emissions caps; specified future caps and floor prices several years into the future; shifted to benchmarking for free allowance allocations to emissions-intensive, trade-exposed (EITE) sources; reduced accessibility to foreign offset credits; and established market stability reserves. By contrast, there is little evidence of shared learning and virtually no change to the design of carbon taxes. We found no jurisdiction that routinely tracks the taxed emissions. Very few jurisdictions regularly assess the effectiveness of the tax in achieving emission reductions. Additionally, adjustments to the tax rate often are unpredictable after an introductory period of three to five years.

Both instruments reduce emissions, but ETSs have performed better than carbon taxes on the principal criteria of environmental effectiveness and cost-effectiveness. Many jurisdictions have implemented both a carbon tax and a GHG ETS, and every jurisdiction that has adopted either instrument has also implemented other policies. More research is needed to improve the design of both instruments and their interaction with non-market-based carbon policies because the use of multiple instruments produces complex interactive and distributional effects. While economically inefficient, market-based policies should be supplemented by non-market-based policies to ensure sustained political support.


Coordinating Local Adaptive Strategies through a Network-Based Approach
Xueqing Shan

As the impacts of climate change become increasingly destructive and pervasive, climate adaptation has received greater political and academic attention. The traditional top-down model for mitigating climate change, however, is ill-suited to implementing effective adaptation strategies. Yet, local communities most impacted by climate change seldom have the tools and resources to develop effective adaptive strategies on their own. This note argues that a bottom-up, network-based approach could be a promising paradigm towards implementing effective adaptive strategies and empowering affected communities.