Spatialisation of incentive-based instruments for pollution control: 50 years of economic theory

The question of spatially differentiated pollution policies first appeared in the economic literature in the early 1970s. For the past 50 years, economists have considered how best to introduce location-specific pollution policies, such as Pigovian taxes or tradable permits, on the basis of site-specific attributes (polluter characteristics, pollution diffusion, environmental objective, etc.). This article reviews the questions raised and the theoretical results obtained. The central question is when to take account of the local characteristics and when to apply a uniform policy. With this question, the authors seek to improve environmental policies to fight pollution more effectively.