The Public Economics of the Environment [Hardcover]

Environmental policy is high on the political agenda in many countries. Considering the various dimensions of environmental quality as public goods, Sandmo identifies the failures of the market mechanism in the face of environmental problems and shows how economic policy should be designed to overcome them. Specific topics covered include the assessment of environmental benefits and costs, the choice between taxes and quotas as policy tools, the principles of environmental taxation in a second-best world, the various notions of the double dividend from environmental tax reform, and international aspects of environmental policy as well as its political economy ramifications. The treatment is mainly theoretical, but the emphasis throughout is on showing how theory can be relevant to the rational design of economic policy.

1. Public Policy and the Environment: An Overview
2. Public, Private, and Environmental Goods
3. Alternatives to Taxes
4. The Estimation of Benefits
5. The Tax Structure and the Environment
6. The Double Dividend and the Marginal Cost of Funds
7. Some Further Perspectives

Sandmo has been an advisor on economic policy to the governments of Norway and Sweden, as well as to the OECD and other international organizations.