Incentives and Environmental Policies

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The economic protection of the quality of the environment took shape properly in the middle of the 20th Century when various economic instruments were proposed to policymakers. Today, protecting the environment is essential, as evidenced in the rise in temperatures, the melting of the icecaps, the disappearance of animal species, etc. Moreover, with recent advances in other disciplines (notably in psychology), economists are turning more and more towards non-monetary forms of incentive. However, questions concerning the effectiveness of these forms arise. Incentives and Environmental Policies deals with the role of the economy in protecting the environment by revisiting traditional economic instruments and pursuing an advanced consideration of the role of new forms of incentive. It appears that, in order to strive towards the best possible environmental quality, policymakers will have to take into account the future of many combinations of socially acceptable incentives.

Benjamin Ouvrard is a Postdoctoral Researcher at the Institut national de la recherche agronomique (INRA) at the Toulouse School of Economics, France. His research focuses on environmental economics, behavioral economics and environmental evaluations.

Anne Stenger is INRA Research Director at the Bureau d'économie Théorique et Appliquée (BETA) at the University of Strasbourg, France. Her work focuses on environmental economics and the implementation of public policy.


Foreword ix

Introduction xvii
Benjamin OUVRARD and Anne STENGER

Chapter 1 The History of Incentives in Environmental Economics 1
Nathalie BERTA

1.1 From Pigou to the origins of the concept of externality 3

1.2 Coase theorem 5

1.3 The emergence of environmental externalities in the 1960s 8

1.4 The rift between theory and practice: regulation versus incentive 10

1.5 In search of second-best solutions 13

1.5.1 The emergence of the idea 13

1.5.2 Least-cost theorems 17

1.6 Conclusion 20

1.7 References 22

Chapter 2 Environmental Incentives Over Time: From the First Forms of Regulation to the Recognition of Cognitive Biases 25
Phu NGUYEN-VAN and Thi Kim Cuong PHAM

2.1 The first forms of environmental regulation 27

2.1.1 Pigovian taxes 27

2.1.2 Externality market 33

2.1.3 Regulatory standards 37

2.2 Different incentives, varying effectiveness 40

2.3 The recent consideration of cognitive biases affecting environmental decisions 43

2.4 References 45

Chapter 3 Environmental Regulation through Nudges 47
Benjamin OUVRARD and Anne STENGER

3.1 A look back at the concept of the nudge 48

3.1.1 Cognitive biases and environmental decisions 49

3.1.2 A more detailed exploration of the nudge concept 50

3.1.3 Some examples of nudges 51

3.2 Green nudges in the field, in the laboratory and in theory 53

3.2.1 Energy conservation and the conservation of natural resources 53

3.2.2 Green nudges in the laboratory 56

3.2.3 Only good results? 57

3.2.4 Premises of theoretical models 59

3.3 Interesting results, but ethical problems 64

3.3.1 Criticism focusing on manipulation 64

3.3.2 Criticism of the paternalistic aspect of nudges 67

3.3.3 Respect of freedoms and environmental regulation: the impossible choice? 68

3.4 Conclusion 69

3.5 References 70

Chapter 4 Incentives, Prosocial Motivations, and Pro-environmental Public Policies: A Reflection Illustrated by the Waste Management Policy in France 77
Cécile BAZART and Rustam ROMANIUC

4.1 Heterogeneous determinants of motivation 80

4.1.1 Internal motivations versus external motivations 80

4.1.2 Social interactions 84

4.2 Waste prevention instruments in France 86

4.2.1 Regulatory motivations 86

4.2.2 The nature of preventative instruments 88

4.3 Tax versus reward: a European perspective 93

4.4 Conclusions and practical implications for heterogeneous determinants of motivation 95

4.5 References 97

Chapter 5 Toward an Endogenization of Incentives? The Role of Education 103

5.1 Introduction: the global mobilization for the environment 103

5.2 The theoretical mechanisms on which pro-environmental education is based 105

5.2.1 Factors influencing environmental behavior: motivations and incentives 106

5.2.2 Theoretical models 110

5.3 Concrete educational measures implemented 117

5.3.1 Education relative to the environment (ERE) 118

5.3.2 Education in sustainable development (ESD) 123

5.3.3 ESD at the international level 126

5.4 What are the results? Evaluations 128

5.4.1 Limoges regional education authority ESD investigation 129

5.4.2 The MGEN investigation 130

5.5 Conclusion: possible improvements for more effective ESD; the necessity of feedback and efforts at permanence within educational mechanisms 131

5.6 References 132

Conclusion 139
Benjamin OUVRARD and Anne STENGER

List of Authors 141

Index 143

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Incentives and Environmental Policies
From Theory to Empirical Novelties
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