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The use of economic instruments for pollution control in Latin America: lessons for future policy design*

Published online by Cambridge University Press:  02 December 2010

MARCELO CAFFERA
MARCELO CAFFERA*
Affiliation:
Departamento de Economía, Universidad de Montevideo, Prudencio de Pena 2440, CP 11600, Montevideo, Uruguay. Tel: +598 2 7074461. Fax: +598 2 7083842. Email: [email protected]
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Abstract

I review the few programs implemented in Latin America to control pollution with direct economic instruments and draw general lessons for the future implementation of these instruments in the region. The available evidence suggests that a combination of low capacities and political economy issues negatively affected the implementation of these programs. As a result, the capacity of the economic instruments to induce emission reductions cost effectively and their future political viability in these countries in the short- or medium-run may have been compromised. This present state of affairs provides more evidence in favor of the policy recommendation that Latin American countries should build local capacities before implementing direct economic instruments, than in favor of the alternative that these countries should adapt direct economic instruments to their institutional and political characteristics.

Type
Research Article
Information
Environment and Development Economics , Volume 16 , Special Issue 3: CRITICAL ENVIRONMENTAL AND DEVELOPMENT ISSUES IN LATIN AMERICA , June 2011 , pp. 247 - 273
Copyright
Copyright © Cambridge University Press 2010

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