Economists and legal scholars have known for decades that "economic instruments," including cap-and-trade regimes and effluent taxes, can reduce emissions at lower cost than command-and-control regulations. Yet, the US system of environmental law remains heavily dominated by command-and-control. How can we explain this remarkable persistence?
This paper considers three alternative explanations: (1) path-dependency; (2) public choice theories of interest-group politics; and (3) social-welfare/economic efficiency. Using examples, mainly from the US Clean Air Act, the paper finds that none of the three alternatives offers a sufficient and complete explanation of the persistence of command-and-control. But all three contribute significantly to a comprehensive explanation.