Innovation in Environmental Policy.

• Author: Marcis, John G.

This book contains a collection of essays from a conference held at Woods Hole Oceanographic Institution. Funding for the conference and the book was provided by the Marine Policy Center at Woods Hole Oceanographic Institution and Resources for the Future, Inc. The essays in this book explore two areas of environmental policy: the enforcement of environmental laws and the expansion of liability law claims.

Tom Tietenberg provides a brief Introduction and Overview of the book in which he stresses that environmental policy has been shaped in an evolutionary manner. As new environmental problems are identified, new approaches designed to resolve the problem are implemented. Recent innovations in environmental policy have enlarged the menu of policy instruments and transformed the roles of various institutions responsible for implementing and enforcing this expanded menu.

The first section of this book contains four essays on environmental enforcement. The enforcement of environmental laws has undergone some dramatic changes in the last decade. In the first essay, Cheryl Wasserman, division head at the Environmental Protection Agency's (EPA) Office of Enforcement, provides an insider's perspective of the federal enforcement and compliance process. Wasserman reviews the basic theories on compliance and discusses various strategies used by the EPA to promote compliance. She takes the view that although economics has made significant contributions to the study of monetary penalties in promoting environmental compliance it has added little to the study of the economics of enforcement.

In the second essay, Kathleen Segerson and Tom Tietenberg describe the three different responses for the EPA after a violation of federal environmental law is detected. These three strategies (an administrative proceeding, a civil judicial proceeding and a criminal proceeding) involve different burdens for the agency and involve different remedies. Most of the essay is devoted to the design of efficient fines. The authors contend that if both the firm and the worker can influence damages then an efficient penalty structure should involve both the firm and the worker. The form of the penalty structure is influenced by the degree of substitutability between corporate and individual penalties. Segerson and Tietenberg contend that when such penalties are not perfect substitutes. more innovative penalties, including incarceration, may be justified.

The third essay, by Mark...