Protecting the environment when costs and benefits are privately known
Abstract
I analyze different approaches for protecting the environment when stakeholders are
privately informed about the costs and benefits of pollution reduction. The presence
of asymmetric information calls for some important departures from the textbook prescriptions
of marketable permits and emission taxes for controlling pollution. For instance,
it may no longer be optimal to equate the social marginal benefits to the marginal
cost of cleanup in determining appropriate abatement levels. I conclude this review
with some suggestions for future research in this area.
Type
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https://hdl.handle.net/10161/2068Collections
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Tracy R. Lewis
Walter M. Upchurch, Jr. Distinguished Professor of Business Administration
Tracy Lewis is Professor of Economics at the Fuqua School of Business at Duke University,
where he holds the Black Chair in Economics. Professor Lewis founded the Innovation
Center at the University. Prior to joining the Duke University Faculty in 2003, he
served on the faculties at the University of Florida, at the California Institute
of Technology, the University of British Columbia, and the University of California,
Davis. Aside from academic employment, he has also held positions at the Fed
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