Jobs and environmental quality: some implications for instrument choice

Both politicians and regulatory agencies are frequently forced to make tradeoffs among competing objectives. When these tradeoffs are highly sensitive, as in the case of jobs and environmental quality, they are rarely made explicitly. This paper takes on the task of uncovering the nature tradeoffs among jobs, economic growth and environmental quality. A case study of Wisconsin's innovative attempt for dealing with its air pollution problems provides important insights into why particular policy instruments are selected in balancing economic and environmental objectives. In line with observations of previous authors, the analysis reveals that there is a marked tendency for the political process to resist market mechanisms for rationing scarce environmental resources. In addition to providing a rationale and evaluation of the specific policy being developed by Wisconsin, the paper develops two testable hypotheses regarding the general selection of instruments for making tradeoffs among jobs and environmental quality.