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49
agency may find it very difficult to set up an emission cap that is acceptable to all
stakeholders; industries may debate on trading mechanisms; environmental groups
may be upset by loose enforcement of trading mechanisms and “hot-spot” issues, etc.
In market-based policy implementation, the existence of economic transaction costs
can impede information sharing and permit trading. Thus, the performance of some
emissions trading programs may be adversely affected (Foster and Hahn, 1995,
Stavins, 1995). Moreover, the implementation process of emissions trading also
involves property rights definition, trading mechanism design, and renegotiation, all of
which entail substantial transaction costs that are political in nature. Therefore, in
many cases both the implementation agency and some key stakeholders have to
renegotiate the implementation rules and to make compromises to move the policy
implementation process. In this section, I provide a model of agency rulemaking that
integrates the concepts of political transaction costs.
3.2.5 Towards a New Model
It takes a long way for a good causal theory to become a policy statute. In
many cases the statute, even though deliberately designed and legally passed, may not
create the optimal incentive mechanism-the rules-in-use-for effective and efficient
enforcement of the original policy goals. Statutes are developed from causal theory
and written on the paper, while rules-in-use are always based on the ground in
real-world settings. Thus, there is always tension between the statute/mandate and the
rules-in-use. I formulate a conceptual model of policy process that capture this tension
and the political dynamics of institutional/rule changes in policy implementation
Object Description
| Title | Processes, effects, and the implementation of market-based environmental policy: southern California's experiences with emissions trading |
| Author | Zhan, Xueyong |
| Author email | xzhan@usc.edu; xueyongzhan@gmail.com |
| Degree | Doctor of Philosophy |
| Document type | Dissertation |
| Degree program | Public Administration |
| School | School of Policy, Planning, and Development |
| Date defended/completed | 2008-07-01 |
| Date submitted | 2008 |
| Restricted until | Unrestricted |
| Date published | 2008-10-30 |
| Advisor (committee chair) | Tang, Shui-Yan |
| Advisor (committee member) |
Mazmanian, Daniel A. Henry, Ronald |
| Abstract | This research provides a positive explanation of the implementation processes and effects of market-based environmental policy by conducting a case study on RECLAIM (Regional Clean Air Incentives Market), the first regional emission permits trading program that has been implemented by South Coast Air Quality Management District (SCAQMD) to address air pollution problems in the Los Angeles air basin since 1994.; Firstly, I developed a game theoretic model of environmental policy implementation. This model integrates theories of administrative rulemaking, policy implementation, institutional rational choice and transaction cost politics. I argue that administrative agency tries to minimize political transaction costs of policy implementation when writing rules.; Based on the formal model, I conducted a quantitative analysis to examine the interactions between SCAQMD and its key stakeholders, such as federal, state and local governments, businesses, and environmental NGOs, during the rulemaking of RECLAIM. I found that SCAQMD is more likely to adopt rule changes suggested by state and federal environmental agencies. This research identifies the dominant role of organized interest groups, the existence of interagency lobbying, and the lack of citizen control over the rulemaking of RECLAIM. Furthermore, I conducted an evaluation of the rules governing the RECLAIM program, and I identify the major distortions of the RECLAIM rules in comparison with an ideal cap-and-trade emissions trading market. Also, I used OLS regression to examine the effects of policy difference on emission level in California between 1990 and 1999. This evaluation fails to reject the null hypothesis that using cap-and-trade (CAT) compared with using command-and-control (CAC) has no different effects on emission of both NOx and SO2 from point sources at the county level in California in the 1990's.; In summary, this research finds that the implementation of emissions trading is political, and interest group politics may distort the regulatory design and implementation of an emissions trading program. While cap-and-trade is promising to better protect our environment and natural resources, its implementation is conditioned by many political and administrative factors. Inadequate rules may come as the results of political compromises, and they may impact the functioning of an emissions trading system. |
| Keyword | emissions trading; rulemaking; RECLAIM; implementation; environmental governance |
| Geographic subject (city or populated place) | Los Angeles |
| Geographic subject (state) | California |
| Coverage date | 1990/2000 |
| Language | English |
| Part of collection | University of Southern California dissertations and theses |
| Publisher (of the original version) | University of Southern California |
| Place of publication (of the original version) | Los Angeles, California |
| Publisher (of the digital version) | University of Southern California. Libraries |
| Provenance | Electronically uploaded by the author |
| Type | texts |
| Legacy record ID | usctheses-m1719 |
| Contributing entity | University of Southern California |
| Rights | Zhan, Xueyong |
| Repository name | Libraries, University of Southern California |
| Repository address | Los Angeles, California |
| Repository email | cisadmin@lib.usc.edu |
| Filename | etd-Zhan-2335 |
| Archival file | uscthesesreloadpub_Volume44/etd-Zhan-2335.pdf |
Description
| Title | Page 60 |
| Contributing entity | University of Southern California |
| Repository email | cisadmin@lib.usc.edu |
| Full text | 49 agency may find it very difficult to set up an emission cap that is acceptable to all stakeholders; industries may debate on trading mechanisms; environmental groups may be upset by loose enforcement of trading mechanisms and “hot-spot” issues, etc. In market-based policy implementation, the existence of economic transaction costs can impede information sharing and permit trading. Thus, the performance of some emissions trading programs may be adversely affected (Foster and Hahn, 1995, Stavins, 1995). Moreover, the implementation process of emissions trading also involves property rights definition, trading mechanism design, and renegotiation, all of which entail substantial transaction costs that are political in nature. Therefore, in many cases both the implementation agency and some key stakeholders have to renegotiate the implementation rules and to make compromises to move the policy implementation process. In this section, I provide a model of agency rulemaking that integrates the concepts of political transaction costs. 3.2.5 Towards a New Model It takes a long way for a good causal theory to become a policy statute. In many cases the statute, even though deliberately designed and legally passed, may not create the optimal incentive mechanism-the rules-in-use-for effective and efficient enforcement of the original policy goals. Statutes are developed from causal theory and written on the paper, while rules-in-use are always based on the ground in real-world settings. Thus, there is always tension between the statute/mandate and the rules-in-use. I formulate a conceptual model of policy process that capture this tension and the political dynamics of institutional/rule changes in policy implementation |
