Environmental protection, inequality, and institutional change

The contemporary world faces an unprecedented environmental challenge. Past international research has amply shown that we cannot afford to wait for a "development path" that automatically takes us on a sustainable future. Whether we look at global or local problems, the international debate increasingly points to the importance of popular support for environmental protection by a broad spectrum of stakeholders. Because environmental sustainability questions the way we produce, consume, and distribute the product of our work, an economic analysis that is limited to one market is insufficient. In addressing Bromley's question, "How do we wish the future to unfold for us?" this paper argues for the need to devote resources to understanding the spillovers between institutional settings and preferences toward the provision of global public goods. Here, this review focuses on labor-market institutions, as labor markets are traditionally the context in which inequality is created at the local and global levels. Labor-market institutional design, via its impact on risk and uncertainty and inequality, may have sizable implications on the provision of environmental care.