Boyden8x10Former White House Counsel C. Boyden Gray gave an interview yesterday on NPR on environmental regulation through government-created markets for emissions trading.

Well, it’s not a new idea, it’s been kicking around economic circles for decades probably. So it was something that had been well ventilated academically and in a sense all I did was take some suggestions and ask the Environmental Defense Fund if they would draft a model trading system for the Acid Rain Program for the 1990 Clean Air Act amendments.

Gray noted the advantages of cap & trade over command-and-control regulation:

Well, the command and control, pipe-by-pipe regulation, top-down was tremendously inefficient, often missed the point, provided no flexibility and no choice. And that market incentive system that would give, you know, polluters or anybody else subject to regulation more flexibility in meeting the standards, that would be a big plus. And you would get more environmental protection at lower costs, which is exactly what happened. It actually happened to a greater degree than we expected. It was a great success.

EPA has announced that the greenhouse gas regulations it plans to propose next week for existing power plants will allow states flexibility in achieving the emissions reduction goals of the rule. Commentators have predicted that state or regional emissions trading programs may be consistent with EPA’s approach. 

The interview and a transcript are available here.