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Chapter 12: Q.5 (page 293)

Consider two approaches to reducing emissions of CO2 into the environment from manufacturing industries in the United States. In the first approach, the U.S. government makes it a policy to use only predetermined technologies. In the second approach, the U.S. government determines which technologies are cleaner and subsidizes their use. Of the two approaches, which is the command-and-control policy?

Short Answer

Expert verified

Whenever industries and manufacturers do not comply, they will be banned and forced to leave the industry. The market incentive plan is another technique to establishing a determined technology that has to be cleaner and funded to be employed.

Step by step solution

01

Command-and-control policy :

The enforced environmental policy is directed by command-and-control policy. It depicts a certain form of regulation.

02

Explanation :

The command-and-control strategy is an example of how to create a unified technology that is predetermined and applied. If industries and manufacturers do not comply, they will be banned and forced to leave the industry. The market incentive plan is another technique to establishing a determined technology that has to be cleaner and funded to be employed.

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Most popular questions from this chapter

Suppose a city releases 16million gallons of raw sewage into a nearby lake. Table 12.8shows the total costs of cleaning up the sewage to different levels, together with the total benefits of doing so. (Benefits include environmental, recreational, health, and industrial benefits.)


Total Cost (in thousands of

dollars)


Total Benefits (in thousands of


dollars)


16 million

gallons


Current situation
Current situation

12 million

gallons


50800
8 million gallons
1501300
4 million gallons
5001650
0 gallons
12001900

a. Using the information in Table 12.8, calculate the marginal costs and marginal benefits of reducing sewage emissions for this city. See Production, Costs, and Industry Structure if you need a refresher on how to calculate marginal costs.

b. What is the optimal level of sewage for this city?

c. Why not just pass a law that firms can emit zero sewage? After all, the total benefits of zero-emissions exceed the total costs.

Classify the following pollution-control policies as command-and-control or market incentive-based.

a. A state emissions tax on the quantity of carbon emitted by each firm.

b. The federal government requires domestic auto companies to improve car emissions by 2020.

c. The EPA sets national standards for water quality.

d. A city sells permits to firms that allow them to emit a specified quantity of pollution.

e. The federal government pays fishermen to preserve salmon.

The rows in Table 12.7 show three market-oriented tools for reducing pollution. The columns of the table show three complaints about command-and-control regulation. Fill in the table by stating briefly how each market-oriented tool addresses each of the three concerns.


Incentives to

Go Beyond


Flexibility about Where and How

Pollution Will Be Reduced


Political Process Creates

Loopholes and Exceptions


Pollution

Charges





Marketable

Permits





Property

Rights

For each of your answers to Exercise 12.2, will equilibrium price rise or fall or stay the same?

Consider two ways of protecting elephants from poachers in African countries. In one approach, the government sets up enormous national parks that have sufficient habitat for elephants to thrive and forbids all local people to enter the parks or to injure either the elephants or their habitat in any way. In a second approach, the government sets up the national parks and designates 10villages around the edges of the park as official tourist centers that become places where tourists can stay and bases for guided tours inside the national park. Consider the different incentives of local villagers - who often are very poor - in each of these plans. Which plan seems more likely to help the elephant population?
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