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Enviro Economics > Unit 6: Setting Targets-Optimal Pollution Ch.8 > Flashcards

Unit 6: Setting Targets-Optimal Pollution Ch.8 Flashcards

1
Q

The 2 Questions for the Economics of Pollution Control

A

1) How much pollution is Acceptable
2) How can we control/reduce pollution to this acceptable level

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2
Q

What is Optimal Level of Pollution

A

-Pollution level that maximizes social benefits
-What society is willing to accept
-Fully internalizes Externality
-Lower Production/Lower Pollution

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3
Q

How does Marginal Cost Reduction Change as we move from Qmax to lower levels of pollution

A

MCR INCREASES
-getting pollution to net zero becomes harder

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4
Q

What is EQUIMARGINAL PRINCIPLE

A

Balancing of marginal costs and marginal benefits to obtain an efficient outcome

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5
Q

What do efficient policies achieve

A

Give greatest result for the lowest cost

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6
Q

Name 4 Pollution Control Policies

A

1) Pollution Standards
2) Technology Based Regulations
3)Pigovian (Pollution) Taxes
4) Transferable (tradeable) permits

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7
Q

What are advantages of POLLUTION STANDARDS POLICY

A

-specifies a definite desired result
-uniform rule on all producers

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8
Q

What are disadvantages of POLLUTION STANDARDS POLICY

A

-Inflexibility
-not cost effective
-little incentive to reduce pollution further than standard

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9
Q

What are advantages to TECHNOLOGY APPROACH POLICY

A

-less enforcement and monitoring
-cost advantage due to standardization: widespread use drives down price of technology

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10
Q

What are disadvantages to TECHNOLOGY APPROACH POLICY

A

-may create little incentive for technology to improve due to Best Available Control Technology
-not cost effective-firms can’t choose other options

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11
Q

What is Best Available Control Technology

A

All firms must use control technology that is most effective

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12
Q

What is Advantage of Pollution Tax

A

Economically Efficient

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13
Q

What is Disadvantage of Pollution Tax

A

Hard to know how much pollution reduction a tax will produce

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14
Q

How do MCR curves affect pollution reduction

A

-Higher MCR curves reduce pollution less
-Lower costs will reduce pollution more

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15
Q

What are Advantages of Tradable Pollution Permits

A

-It is direct regulation + emissions tax
-sets definite limit on pollution
-Cost effective: uses market
-economically advantageous for firms
-Pollution levels can be lowered by market means:
–other firms buy and retire permits
–reduce number of permits issued

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16
Q

How does a Tradeable Pollution Permit work

A

-Firms will PURCHASE permit when permit price < MCR
-Firms will SELL permit when permit price > MCR

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17
Q

What are DISADVANTAGES of Tradeable Pollution Permits

A

-may not produce enough changes
-other variables may come into play

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18
Q

What are NONLINEAR/ THRESHOLD effects

A

-pollution damages not linearly correlated with pollution levels
-threshold low-damages increase significantly with increased pollution
ex. Lead
-not addressed by market solutions

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18
Q

What is LOCAL pollutant

A

-adverse effects only in small local area
-not addressed by market solutions

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19
Q

What are effective policies for NONLINEAR/ LOCAL pollutants

A

-regulations
-tech based approach
-prohibition of substance

20
Q

What are REGIONAL POLLUTANTS

A

-Cause adverse impacts distant from where it is emitted
-market based solution works best

21
Q

What is UNIFORMLY MIXED POLLUTANT

A

-emitted by many sources
-uniform concentration across region

22
Q

What is an example of UNIFORMLY MIXED POLLUTANT

A

CO2

23
Q

What is NONUNIFORMLY MIXED POLLUTANTS

A

Emitted in varying concentrations
Remain at different levels in different locations
-market based approaches don’t work here

24
Q

What is an example of NONUNIFOMRLY MIXED POLLUTANTS

A

Lead

25
Q

What is a Flow Pollutant

A

Short-term impact/ absorbed harmlessly

26
Q

What is a CUMULATIVE/ STOCK pollutant

A

pollutant persists for long term-accumulates

27
Q

What is GLOBAL POLLUTANT

A

causes global impacts

28
Q
A
29
Q

What is difficult about tax and permit policies

A

Usually not enough information to know marginal damage and marginal cost

30
Q

What do the MD and MCR curves look like if there is Too many permits or Too little tax

A

MD > MCR
Increased Pollution Level

31
Q

What is best if MD curve is steep and MCR is flat

A

Permits

32
Q

What policy is best if MCR curve steep and MD curve flat

A

Tax

33
Q

How do taxes and permits affect technological change

A

-amt of permits must be adjusted for tech change
-amt of tax does not need to change-based on marginal damage of pollution

34
Q

What are the 2 types of permit allocation

A

-Free gvt issue
-Auction permits

35
Q

What are the disadvantages of free permits

A

-gvt looses out on revenue
-may reward inefficient plants
-new firms may have to purchase permits on open market

36
Q

What is Upstream Policy

A

Policies to regulate emissions as near as possible to point of natural resource extraction

37
Q

What policies are best if objective is to keep pollution at a certain level with more certainty

A

Standards and Permits

38
Q

What policy is best to encourage innovation and minimize control costs

A

Pollution Tax

39
Q

What are Revenue Neutral Tax Policies

A

Revenues of a certain tax offset by lowering other taxes

40
Q

What are the 2 Categories of Air Pollutants

A

Criteria Air Pollutants
Toxic Air Pollutants

41
Q

What is an example of an Air Pollution Regulation

A

Clean Air Act-Standards Based

42
Q

What is an example of a Water Pollution Regulation

A

Clean Water Act

43
Q

What does the EU policy REACH stand for

A

Registration
Evaluation
Authorization
Restriction of
Chemicals

44
Q

How is REACH different from Toxic Substances Control Act

A

REACH places burden of proof on manufactures vs. Toxic control act places burden on EPA

45
Q

What produces Economic Efficiency

A

When Marginal Costs of Pollution Reduction = Marginal Damage of Pollution

46
Q

What are the biggest issues with Market Based Policies

A

-fail to control pollutants
—that exhibit nonlinear effects
—exhibit threshold damage effects
—pollutants with local impact

47
Q

What considerations are taken into account when choosing a pollution policy

A

-patterns of costs/ damages
-options for improved tech
-minimize unnecessary costs/ damages
-promote tech progress

Enviro Economics (21 decks)

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