In Oxford Handbook of Law and Economics, Vol 2: Private and Commercial Law (Francesco Parisi ed. 2017)
Michael A. Livermore and Richard L. Revesz
The law and economics perspective provides a useful lens for many environmental policy questions. Normative deliberation concerning the construction of environmental policy can be informed by an economics perspective. Economic analysis can also be brought to bear on empirical questions concerning the effects of environmental policies and the political economy factors that affect the selection of environmental policies.
Indeed, the overlap between environmental policy and economics is sufficiently extensive that environmental economics constitutes a distinct discipline within the field of economics.
In recent years, there have been some significant normative advances in the area of environmental law and economics. For example, the emergence of climate change as the area of central concern for environmental regulation has brought a great deal of attention to the question of how to discount benefits that accrue into the far future and primarily affect individuals not yet born. Also, the rise of behavioral law and economics has created a shift away from exclusive reliance on neoclassical models.
But the most significant changes have been on the positive side. In particular, the traditional alignment of interest groups has come close to experiencing an about-face. Conservative, anti-regulatory groups traditionally favored cost-benefit analysis, market-based instruments, and decentralization. Progressive, pro-regulatory groups traditionally opposed these approaches. In recent years, however, the tables have often been turned. These shifts suggest that commitment to principles is secondary to commitment to substantive regulatory outcomes, with groups of both sides of the spectrum availing themselves of whatever argument will better promote their preferences concerning the stringency of regulation.