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Chapter 12: Q.7 (page 293)

An emissions tax on a quantity of emissions from a firm is not a command-and-control approach to reducing pollution. Why?

Short Answer

Expert verified

Emission taxes are market-based environmental measures that allow businesses to minimize certain types of emissions.

Step by step solution

01

Step 1::  Command—and—control policy : 

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

02

Explanation :

Emission taxes are a type of tax that has been levied on the emissions produced by industrial and commercial activities. It comprises coal-fired power generation as well as transportation-related fossil fuel combustion. The imposed tax is a type of consumption tax that should be avoided or minimized. Emission taxes are a type of potentially cost-effective tax that aids in environmental protection across the world. Imposing an emission fee on a company is not part of the command and control strategy since it gives companies the freedom to utilize fossil fuels, release carbon, or manage it through incentives. Emission taxes are market-based environmental measures that allow businesses to minimize certain types of emissions.

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Most popular questions from this chapter

Table 12.12, shows the supply and demand conditions for a firm that will play trumpets on the streets when requested. QS1 is the quantity supplied without social costs. QS2 is the quantity supplied with social costs. What is the negative externality in this situation? Identify the equilibrium price and quantity when we account only for private costs, and then when we account for social costs. How does accounting for the externality affect the equilibrium price and quantity?

Is zero pollution possible under a marketable permits system? Why or why not?

From an economist's perspective, is it sound policy

to pursue a goal of zero pollution? Why or why not?

Four firms called Elm, Maple, Oak, and Cherry, produce wooden chairs. However, they also produce a great deal of garbage (a mixture of glue, varnish, sandpaper, and wood scraps). The first row of Table 12.6shows the total amount of garbage (in tons) that each firm currently produces. The other rows of the table show the cost of reducing garbage produced by the first five tons, the second five tons, and so on. First, calculate the cost of requiring each firm to reduce the weight of its garbage by one-fourth. Now, imagine that the government issues marketable permits for the current level of garbage, but the permits will shrink the weight of allowable garbage for each firm by one-fourth.

What will be the result of this alternative approach to reducing pollution?


Elm
Maple
Oak
Cherry
Current production of garbage (in tons)
20406080
Cost of reducing garbage by first five tons
\(5,500
\)6,300
\(7,200
\)3,000
Cost of reducing garbage by second five tons
\(6,000
\)7,200
\(7,500
\)4,000
Cost of reducing garbage by third five tons
\(6,500
\)8,100
\(7,800
\)5,000
Cost of reducing garbage by third five tons
\(7,000
\)9,000
\(8,100
\)6,000
Cost of reducing garbage by fifth five tons
\(0
\)9,900
\(8,400
\)7,000

What is command-and-control environmental regulation?
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