… the Article constructs a model for evaluating market emergence and success, and with this framework, the Article makes two major contributions. First, it offers a concrete and pragmatic method for gauging the desirability of market tools for certain resources in the environmental context and beyond. For instance, the model can identify specific situations where a cap-and-trade approach will be less effective than a Pigouvian-tax, or where a licensing system will be superior to a laissez-faire one. Consideration of severance costs and adjustment failure costs offers a generalizable model for describing the feasibility of commodifying environmental goods, prescribing interventions to marginally improve market instruments in general, and evaluating governance approaches for a variety of contexts.
Second, this Article contributes to the theoretical literature on commodification by offering a positive economic framework that can synthesize the leading scholarship and explain existing reservations regarding commodification. It provides a descriptive economic account that can help ground moral intuitions and objections about markets and commodification. As a result, it gives fresh insight into why existing laws and policies are as they are, and it bridges moral and economic arguments, providing a common point of departure for future engagement in these debates.
Michael Pappas and Victor B Flatt, The Costs of Creating Environmental Markets: A Commodification Primer, 9 UC Irvine Law Review 731 (2019).