Free Market Solutions to Environmental Problems
July 21st, 2006 by Sean FlynnA recent publication from scholars at the American Enterprise Institute examines the benefits of market-based approaches to environmental regulations. The authors argue that most nonmarket approaches have very high costs relative to benefits, while market-based regulations are much cheaper and more effective. From this analysis, they conclude that environmental externalities, such as pollution, are best solved by environmental taxes and cap-and-trade laws, which allow for pollution reduction at lower costs than with nonmarket intervention.
