As a contribution to the debate over market-based environmental regulation, this article examines the reaction of stakeholders to cap-and-trade programs proposed and/or implemented in the United States, the European Union, and the Netherlands for industrial emissions of certain pollutants. Those pollutants include nitrogen oxides (NOX), sulfur dioxide (SO2), mercury (Hg), and greenhouse gases such as carbon dioxide (CO2). For the purpose of the article, stakeholders include environmental groups, regulators, and particularly industry.
The broad conclusion, to which the remainder of the article provides context, is straightforward: Industry dislikes regulation. It strongly dislikes redundancy. It loathes uncertainty. Even emitters that have profited through emissions trading seem to remain generally averse to uncertainty. The result is a bias for the status quo, except when that status quo becomes too unpredictable or otherwise burdensome, and a bias against overlapping regulatory regimes.