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lecture 2 - Environmental Politics Professor Lecture 2...

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Unformatted text preview: Environmental Politics Professor Lecture 2: Kelemen Basic Concepts in Environmental Policy January 26, 2009 Obama to Let States Restrict Emissions Standards By JOHN M. BRODER and PETER BAKER, NEW YORK TIMES President Obama on Monday will direct federal regulators to move swiftly to grant California and 13 other states the right to set strict automobile emissions and fuel efficiency standards, two administration officials said Sunday evening. The directive makes good on an Obama campaign pledge and marks a sharp reversal from Bush administration policy. Granting California and the other states the right to regulate tailpipe emissions is one of the most dramatic actions Mr. Obama can take to quickly put his stamp on environmental policy. The presidential orders will require automobile manufacturers to begin producing and selling cars and trucks that get higher mileage than the national standard, and on a faster phase-in schedule. The auto companies had lobbied hard against the regulations and challenged them in court. Mr. Obama will use the announcement of his latest directive to bolster the impression of a sharp break Beyond the California waiver, officials said, Mr. Obama will announce that he is moving forward with nationwide regulations requiring the automobile industry to increase fuel efficiency standards, rules that the Bush administration decided at the last minute not to issue. He will also order federal departments and agencies to find new ways to save energy and be more environmentally friendly. And he will highlight the elements in his economic plan intended to create new jobs around renewable energy. In a White House announcement scheduled for Monday morning, Mr. Obama will also direct federal agencies to immediately begin work on making all government buildings more energy He will also direct the Department of Transportation to immediately begin drafting automobile fuel-economy regulations to comply with a law enacted in December 2007. Former President Bush delayed implementation of the law and left office saying there was not sufficient time to write the rules. But the centerpiece of Monday’s East Room announcement is Mr. Obama’s directive to the Environmental Protection Agency to immediately begin work on granting the so-called California waiver, which allows the state, a longtime leader in air quality matters, to set its own standards for automobile emissions. The Bush administration denied the waiver in late 2007, saying that allowing California and the 13 other states the right to set their own pollution rules would result in an unenforceable patchwork of The Commons: Port Meadow outside Oxford “The Tragedy of the Commons”, by Garrett Hardin 1968 in Science Imagine a common pasture Local herders can put as many sheep out to graze on the commons as they wish Benefit of each additional sheep (ie money from selling it at market) accrues to individual herder Cost of each additional sheep (ie slight deterioration of meadow “The Tragedy of the Commons”, by Garrett Hardin 1968 in What is the problem? Science Assume herders behave rationally, to maximize their individual selfinterest. From the individual’s perspective, benefits of letting an additional animal graze outweigh the costs BUT, if everyone follows this logic, the common meadow will be overgrazed and eventually destroyed making everyone worse… It is a tragedy because all in the community would have been better off had they found a way to preserve the How can you solve the tragedy of the commons? Divide up and privatize the commons. Regulate use of the commons Quotas Grazing fees Tradable permits Common Pool Resources and Public Goods ‘The Commons’ is an example of a Common pool resource (closely related to idea of a ‘public good) What are some other examples? Public Goods Goods that benefit everyone and that no one can be excluded from using Non-excludable - once the good is produced, it is difficult to exclude some people from using it (or to make them pay for it.) Non-rivalrous - one person's using the good does not prevent others from using it. Can be natural or man-made Examples: National defense, Clean Air, the global environment (climate, ozone layer, atmosphere) Markets will under-provide public goods Due to the free rider problem Types of Goods Excludable Nonexcludable Rivalrous Private Goods House, car, clothes, food Non-rivalrous Common Goods (aka Common pool resources) Club Goods Public Goods Fisheries, Cable tv, National satellite radio, Public Lands Defense, air traffic Global climate, Types of Goods Roads? Public transport? Public Schools? Parks? Externalities Occur when costs (or benefits) of a transaction are experienced by members of society that are not taking part in the transaction Positive Externalities: Defense Education Dirty Laundry Transboundary air/water pollution The real cost of fuel? Negative Externalities: Internalizing negative externalities Externalities Collective Action Problem Puzzle: Why do large groups who share a common interest often fail to act collectively to pursue their interests? Diffuse Interests vs. Concentrated Interests Collective action problems of diffuse interests The Free Rider Problem Outcome = individually rational, but collectively suboptimal Examples: Breathers of air, Consumers of sugar, citizens in a dictatorship Solving Collective Action problems Selective incentives Calendar with cute animals, travel mug, etc. Social pressures (small local groups, ‘clubs’) Policy Entrepreneurs Ralph Nader, Cesar Chavez Market failure A situation in which market forces fail to allocate goods and services efficiently…Or more generally in which markets fail to maximize social welfare And what is ‘efficient’? An allocation is efficient (Pareto Optimal) if there are no alternative allocations that would make someone better off without also making someone worse off. An allocation is inefficient (suboptimal) if an alternative allocation could make someone better off without making anyone worse off. Market failure When does market failure happen?.. When there is a discrepancy between private costs of a transaction and its social costs, such that rational individual behavior leads to collectively suboptimal outcome. Many environmental problems involve market failures Tragedy of the Commons Public Goods problems Collective Action Problems / Free Rider Problem Externalities …and other recent problems (Financial Market Failure Market failures often prompt government intervention Regulation (Fisheries, air pollution) Government subsidies (infrastructure) Government ownership / control (Defense, Education) Government intervention can lead to new ‘failures’ (Government failure/regulatory failure) …leading ‘libertarians’ and some conservatives to say ‘government is the problem’. Gov’t should provide defense and not much else. But is government failure worse than ...
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