Markets Vs. Mandates: Promoting Environmental Quality And Economic Prosperity

As we celebrate America’s semiquincentennial, it is useful to reflect on how institutional bedrocks like property rights and the rule of law laid the foundation for economic growth and environmental investments. In the early years of the republic, markets stimulated entrepreneurship and productivity largely based on the nation’s abundant natural resources. As incomes rose, however, we demanded more from nature focusing on environmental services and amenities. American institutions have enabled environmental markets to emerge alongside environmental mandates, allowing comparisons of these two modes of environmentalism.

Since the 1970s the federal government has taken the reins in setting and enforcing environmental regulations, with state and local governments playing a much smaller role. But that hierarchy was not always present. Federalism meant that state and local governments focused on environmental problems close to home—e.g. air and water emissions and land and wildlife management. This session will consider tradeoffs between federal, state, and local control and compare environmental results with examples ranging from wildlife, land, air and water, oceans, and the global atmosphere.

The recent revival of large and broad tariffs casts new light on the question of whether international trade is good or bad for the environment? Should environmentalists celebrate or bemoan protectionism? Panelists will discuss intended and unintended consequences of changing trade policy for a range of environmental indicators including natural resource use, air and water quality, carbon emissions, and green technological innovation.

Citizens in communities across America are grappling with whether to embrace data centers in their jurisdictions. On one hand is the promise of high-paying jobs for construction and operation, and of considerable payments to local governments and private landowners. On the other is the threat of high electricity prices, water and noise pollution, reduced property values, and an impaired quality of life. How will the benefits and costs play out and how closely will reality correspond with current expectations and fears? Discussants will compare debates over data centers to those over hydraulic fracking 20 years ago and provide early evidence on the local effects of data centers.

This session features entrepreneurs who utilize markets to improve the environment. Their experiences offer insight into when markets and mandates succeed, when they fail, and how government policy can aid or frustrate enviropreneurship.

Nineteenth century commercial trade drove wildlife to the brink. Twentieth-century mandates stabilized some populations in sea and produced stunning recoveries on land, like whitetail deer. But these aging frameworks face new problems: on land, a shrinking base of hunters unable to manage overabundant species without help from predators like wolves; at sea, a rising army of recreational anglers now threaten the same fish stocks that commercial catch shares rebuilt. This session asks what each story teaches the other, and whether mandates can create a foundation for markets rather than a substitute.

Because the goal of achieving net-zero with mandates and subsidies appears less and less achievable, we are learning there are better ways of reducing emissions and better ways of adapting to the effects of climate change. This session will focus on what we are learning about the effectiveness of carbon pricing and about adaptation stimulated by market forces related to real estate and insurance transactions.