4. Understanding different policy options to correct for negativeexternalities Carbon dioxide emissions have been linked to increased air pollution. The following table lists some possible public policies aimed at reducing the amount of carbon dioxide in the air. For each policy listed, identify whether it is a command-and-control policy (regulation), tradable permit system, corrective subsidy, or corrective tax. Command- and- Tradable Control Policy Permit Corrective Subsidy Corrective Public Policy System Tax The government agrees to reimburse all factories that purchase new, emissions-reducing technology in order to provide cleaner air. The government limits total carbon-dioxide emişsions by all factories to 120,000 tons per month. Each individual factory is given the right to emit 110 tons of carbon dioxide, and factories may buy and sell these rights in a marketplace. The government charges factories $400-for every ton of carbon dioxide they emit. The government orders every factory to adopt a new technology, which reduces carbon- dioxide emissions into the atmosphere.

4. Understanding different policy options to correct for negativeexternalities Carbon dioxide emissions have been linked to increased air pollution. The following table lists some possible public policies aimed at reducing the amount of carbon dioxide in the air. For each policy listed, identify whether it is a command-and-control policy (regulation), tradable permit system, corrective subsidy, or corrective tax. Command- and- Tradable Control Policy Permit Corrective Subsidy Corrective Public Policy System Tax The government agrees to reimburse all factories that purchase new, emissions-reducing technology in order to provide cleaner air. The government limits total carbon-dioxide emişsions by all factories to 120,000 tons per month. Each individual factory is given the right to emit 110 tons of carbon dioxide, and factories may buy and sell these rights in a marketplace. The government charges factories $400-for every ton of carbon dioxide they emit. The government orders every factory to adopt a new technology, which reduces carbon- dioxide emissions into the atmosphere.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 5PA

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Similar questions

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?
An emissions tax on a quantity of emissions from a film is not a command-and-control approach to reducing pollution. Why?
Classify the following pollution-control policies as command-and-control or market incentive based. A state emissions tax on the quantity of carbon emitted by each firm. The federal government requires domestic auto companies to improve car emissions by 2020. The EPA sets national standards for water quality. A city sells permits to films that allow them to emit a specified quantity of pollution. The federal government pays fishermen to preserve salmon.
Suppose you want to put a dollar value on the external costs of carbon emissions from a power plant. What information or data would you obtain to measure the external [not social] cost?
(External Costs with Variable Technology) Think of an industry that pollutes the water and has access to variable technology for reducing that pollution. Graphically illustrate and explain the impact of each of the following, other things constant, on the optimal level of water quality: a. New evidence is discovered about a greater risk of cancer from water pollution. b. The cost of pollution-control equipment increases. c. A technological improvement reduces the cost of pollution control.
What is a marketable permit and what incentive does it provide for a firm to account for external costs?
Name two public goods and explain why they are public goods.
Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once we accounted for both the private and additional external costs, the market price increased by only 50. If the external costs were 100 why did the price only increase by 50 when we accounted for all costs?
Can extreme levels of pollution hurt the economic development of a high-income country? Why or why not?
What are better-defined property rights and what incentive do they provide to account for external costs?
What is command-and-control environmental regulation?