David A. Weisbach

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Article
Volume 90.4
Regulatory Trading
David A. Weisbach
Walter J. Blum Professor of Law, University of Chicago Law School.

Send comments to d-weisbach@uchicago.edu. I am thankful for Jen Nou and Mark Templeton for discussions and the many valuable comments from workshops at the University of Chicago Law School and Washington University Law School. Special thanks to Richard Sandor for allowing me to participate in his class at the University of Chicago Law School, The Law and Economics of Natural Resource Markets.

Regulatory trading systems, such as the SO2 cap-and-trade system, are ubiquitous in environmental and natural resources law. In addition to cap-and-trade systems for pollutants such as SO2, NOx, and CO2, environmental and natural resources law uses trading in areas such as endangered species, water quality, wetlands, vehicle mileage, and forestry and farming practices. Trading, however, is rarely used as a regulatory approach in other areas of law. This Article seeks to identify the reasons for this dichotomy. To understand the dichotomy, the Article examines the uses of trading in environmental and natural resources law, where it has been successful, and where problems have arisen, including hot spots problems, environmental justice problems, measurement problems, and moral problems with the use of markets. It then considers the possibility of trading in six nonenvironmental areas of law to see whether trading can be helpful, and if not, why not.

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Essay
81.1
Audits as Signals
Maciej H. Kotowski
Assistant Professor of Public Policy, John F. Kennedy School of Government, Harvard University
David A. Weisbach
Walter J. Blum Professor of Law, The University of Chicago Law School
Richard J. Zeckhauser
Frank Plumpton Ramsey Professor of Political Economy, John F. Kennedy School of Government, Harvard University