Environmental (De-) Regulation, Competition, and Policy Rules

This article analyzes some problems regarding our knowledge of environmental policy. Sustainable development as the prospective enlargement of the political agenda has been identified as a long-term challenge for economic policy which could get trapped in a new form of interventionism. The evolutionary market approach that is presented here focuses on development risks of environmental policy that are mostly neglected in standard theory. A transfer of the Hayekian concept of negative rules to the realm of environmental policy is critically discussed. A straight-forward transfer of Hayek's theory stressing the importance of negative rules cannot be recommended, since even the negative rules carry some development risks in the realm of environmental policy. Some preliminary political consequences are drawn which are appropriate to limit the extension of environmental targets in the future.