Topic4.2 Flashcards
1
Q
What are the main types of public policy for environmental economics?
A
- Taxes and permits
- Command and control instruments
- Economic incentives and campaigns
- Direct production of environmental quality
- Prevention of pollution
2
Q
What is the purpose of a campaign in environmental policy?
A
- Influence behaviour without mandatory rules
- Uses information: marketing strategies, events, banners
- Effectiveness varies by situation
3
Q
What are examples of direct production of environmental quality?
A
- Creating nature reserves
- Wastewater treatment
- Lake aeration to add oxygen
4
Q
How can government support pollution prevention?
A
- Enhancing ecological technology
- Collaboration with universities and private sector
- Scholarships and funding for research
5
Q
Why is innovation essential in environmental policy?
A
- Growth through innovation in technology
- Driven by profit motive
- Government incentives can direct sustainable innovation
6
Q
What are Command-and-Control (CaC) instruments?
A
- Setting standards (e.g., pollution limits)
- Legal requirements for companies
- Aim for optimal pollution control
7
Q
What are examples of command-and-control standards?
A
- Ambient pollution standards: parts per million of pollutants
- Emission standards: limits on emitted pollution
- Technology standards: required tech or practices
8
Q
What are CAFE standards?
A
- Corporate Average Fuel Economy standards
- Regulate fuel efficiency for vehicles
- Set by US National Highway Traffic Safety Administration
9
Q
What is the Swiss Energy Label for cars?
A
- Provides fuel consumption and CO2 emissions info
- Transparency for buyers
- Must be displayed on or near vehicles
10
Q
What are the drawbacks of CaC instruments in economic analysis?
A
- Little incentive for innovation
- Enforcement challenges
- High total abatement costs when firms vary in cost efficiency
11
Q
How do economic incentives work in environmental policy?
A
- Align private and social interests
- Examples: tradable pollution permits, pollution tax, abatement subsidies
12
Q
What is the Pigouvian tax?
A
- Tax on pollution to reduce emissions
- Minimises total abatement costs by equalising marginal costs
13
Q
What are tradable pollution permits?
A
- Define permitted total pollution
- Businesses can trade permits
- Requires distribution and free trading rules
14
Q
What is the double dividend in environmental taxation?
A
- Emission tax revenue used to reduce other taxes
- Increases economic efficiency
- Achieves both environmental and economic benefits
15
Q
What are the positive side effects of environmental reform?
A
- Greenhouse gas reduction benefits health
- Reduces other pollutants
- Co-benefits like improved air quality
