Political lobbying and the choice of environmental policy instruments

Abstract

This paper explores the manner in which political and economic factors influence the choice of environmental policy instruments and the degree of regulation. It is demonstrated that political factors provide strong incentives for policy convergence. Moreover, the prevalence of pollution emission standards over priced based policy instruments may partly reflect the consequences of rent seeking behaviour by rival lobby groups. It is suggested that the predictions of the model appear to accord with observed policy platforms of political parties.