ABSTRACT
This chapter reviews the relevant intellectual traditions in economics, political science, and law. It considers the demand for environmental policy instruments and examines the supply side. The federal environmental statutes further the disparities by bifurcating the regulatory requirements that apply to new and existing sources. By contrast, political scientists and economists studying the supply side of regulation have focused on the voting behavior of legislators and the institutional structure of the legislature. The chapter explores the nature of demand by firms and individuals, dividing the latter category into several overlapping groups, and then considers the role of interest groups in the political rlarket. It focuses on the origins of supply and demand for a single policy instrument. There are several plausible positive political economy explanations for the nature of the supply of environmental policy instruments. The market model will, in the end, be an imperfect and incomplete description of political behavior.
