ABSTRACT
The regulatory authority that is responsible for establishing environmental policy has an extremely difficult task. Some of the difficulties it faces are of a technological nature and rapid improvements are being made. Other problems are more intractable, and the nature of those difficulties for the environmental policy maker was hinted at in Chapter 7, where information problems facing households were introduced-if households themselves do not know what an environmental improvement is worth, how can the policy maker aggregate their willingness to pay (WTP)? We begin with the more tractable problems facing the regulatory authority’s policy makers.
