Coase Rules OK? Exploring Prospects for Private Sector Environmental Protection

Environmental policy in Australia, and internationally, has been characterised by taxes, subsidies, regulations and direct state provision. These Pigouvian-inspired measures have paid little attention to the institutional drivers (Coasian rules) that underpin environmental issues. A re-orientation towards environmental protection initiatives driven by institutions that are endogenous to society offers the potential to lower transaction costs and release exchange efficiency improvements of the type demonstrated by Ostrom in the context of common property resources and Williamson in the case of firm organisation. Australian examples of private sector nature protection initiatives are used to demonstrate this potential.