Albert Nichols

Albert Nichols is affiliated with the Kennedy School of Government, Harvard University.

  • Targeting Economic Incentives for Environmental Protection

    Albert Nichols and Richard Schmalensee

    This book makes a major and original contribution to the "incentives vs. standards" debate by showing how different targets (the points at which incentives are applied) affect the ability of regulation to provide environmental protection at lowest possible cost.

    Economists have long argued that environmental regulation should rely less on command and control approaches that employ uniform standards, and more on economic incentives, such as emission charges and marketable emission permits. This book makes a major and original contribution to the "incentives vs. standards" debate by showing how different targets (the points at which incentives are applied) affect the ability of regulation to provide environmental protection at lowest possible cost. In particular, it argues that scholars and regulators both have paid insufficient attention to developing strategies that are sensitive to major variations across plants in the benefits of controlling emissions.The book develops a theory that shows how the choice of target interacts with the charge or standard in determining the net benefits of regulation. This conceptual framework is applied to a case study of proposed regulations for chemical plants that emit benzene, which is a suspected cause of leukemia. It reveals that a charge targeted on exposure would perform much better than an emission standard or the type of uniform emission charge usually advocated by economists.

    Albert L. Nichols is presently on leave from Harvard as Director of the Economic Analysis Division of the Office of Policy, Planning, and Evaluation, and Special Assistant to the Assistant Administrator for Policy, Planning, and Evaluation, U.S. Environmental Protection Agency, Washington, D.C. The book is eighth in the Regulation of Economic Activity Series, edited by Richard Schmalensee.

    • Hardcover $33.00

Contributor

  • Incentives for Environmental Protection

    Thomas C. Schelling

    This book explores the extent to which pricing incentives such as charges on emissions; in contrast to regulatory standards, can be shaped into a practical policy that is technically effective, politically enactable, administratively enforceable, and equitable. It also compares he advantages and disadvantages of this approach to those that characterize the policy of compliance to regulatory standards. And it identifies the criteria on which either pricing mechanisms or regulatory standards should be based. Three case studies comprise the heart of the book. One investigates carcinogenic chemical emissions, another audits the tradeoffs in controlling aircraft noise near major airports, and the third treats the protection of air quality from pollution by primarily stationary sources. The case studies are introduced by a chapter that gives numerous examples of possible pricing approaches and identifies common lessons that the three diverse studies reinforce.: The studies are followed by a chapter which is based on interviews with Congressional staff, environmentalists, and industrial lobbyists and other interest groups in Washington, revealing their assessments of pricing mechanisms in environmental protection.

    The book is fifth in the series, Regulation of Economic Activity.

    • Hardcover $45.00