Environmental law and economics in Europe and in the United States

Seminar paper from the year 2008 in the subject Law, printed single-sided, grade: 1,6, Linköping University Sweden (Linköping University Sweden), course: Law and Economics, 16 entries in the bibliography, language: English, abstract: The paper analyses the general structure of the law and economics theory applied to environmental issues. The general idea of the law and economics literature is provided focusing, in particular, on the comparison between legal and economic instruments to control environmental risk. The core of this paper is that the selection of a regulation framework and a legal framework to implement an environmental policy is a demanding task, which calls for structured analysis to model the interactions between governments, firms and regulators. Fundamental objective of this contribution is to talk about the law and economics with respect to environmental regulation. In turn to do that, an overview of the literature within the traditional economic analysis of law method is provided concentrating, in particular, on the comparison between legal and economic instruments to control environmental risk. Environmental law and economics deals with, among other topics, "legal" instruments such as liability rules and the traditional command and control mechanisms like environmental standards and targets and "economic" instruments (such as taxes and marketable pollution rights). Nevertheless, this terminological distinction can be deceptive in view of the fact that the legal instruments are also economic, in the sense that they offer an incentive to obey with certain policy goals. Likewise, the economic instruments are also legal in the sense that a system of taxes or marketable pollution rights needs a legal framework to be effective (Faure, 1998). The thought of applying economic concepts to increase a better understanding of law helps either in explaining how legal rules progress, or what might be the consequences of alternative rules. Largely, one of the