Microeconomics,, 16th Canadian Edition

17 The Economics of Environmental Protection ...

Chapter Outline 17.1 The Economic Rationale for Reducing Pollution 17.2 Pollution-Reduction Policies 17.3 The Challenge Of Globa ...

people and property. Local zoning laws regulate the ways we use land. Regulatory commissions set rates for electricity, natural ...

17.1 The Economic Rationale for Reducing Pollution As a consequence of producing or consuming goods and services, “bads” are pro ...

Figure 17-1 A Pollution Externality in a Competitive Market suppliers, employees, and customers. Its water-discharged effluent d ...

competitive free market will produce where the demand and supply curves intersect—that is, at and If each unit of output of this ...

marginal benefit of consumption is just equal to social marginal cost of production. The socially optimal level of output is suc ...

Figure 17-2 The Optimal Amount of Pollution Abatement The Optimal Amount of Pollution Abatement Notice from Figure 17-1 that the ...

The optimal amount of pollution abatement occurs where the marginal cost of reducing pollution is just equal to the marginal ben ...

value, and we are more familiar with applying the concepts of supply and demand for goods with positive values. If no pollution ...

Marginal Benefit of Abatement The downward-sloping curve in Figure 17-2 is the “demand” for pollution abatement and reflects the ...

intervene in private-sector markets if the outcome shown in Figure 17-2 is to be attained. The second problem is that the optima ...

17.2 Pollution-Reduction Policies We examine three different types of policies designed to bring about the optimal amount of pol ...

contamination they cause in the ground water. Similarly, the Canadian federal government gradually reduced the amount of lead al ...

Figure 17-3 The Inefficiency of Direct Regulatory Controls In the terminology of Chapter 12 , direct regulatory controls are oft ...

Requiring equal amounts of pollution abatement from different polluters is inefficient when the different polluters have differe ...

firms is the given level of pollution abatement being achieved at the lowest possible cost. Direct regulatory controls are usual ...

Figure 17-4 The Efficiency of Emissions Taxes Emissions Taxes An alternative method of pollution reduction is to levy a tax on e ...

Emission taxes can lead to efficient pollution abatement. As in Figure 17-3 , Firm A faces a lower marginal cost of pollution ab ...

The above analysis applies to any level of an emissions tax. But what is the level at which an emissions tax should be set to ac ...