Markets for Bads

By the mid-1980s, as the nation confronted new problems such as the ozone hole and long-standing issues such as acid rain, the Environmental Protection Agency (EPA) faced reduced political support for direct mandate interventions. Harnessing growing support for market-based strategies among environmental advocates, the EPA increasingly turned to incentives, tradable allowances, and other market-based policies in the 1980s. This shift culminated in the development of the nation’s first cap-and-trade program to address the problem of acid rain in the Clean Air Act Amendments of 1990. As the nation looked forward to new concerns including global warming, an era of direct mandates informed by natural rights to clean air and a healthy environment seemed to be at a close, supplanted by a new environmentalism that held out market-based policies and a monetary conceptualization of environmental value as a new model for governance.