suppose the government cant accurately measures and
monitor the pollution emissions from each polluter but it knows the
marginal damages per unit pollution are
constant and these are relatively
constant
what policies would you recommend that the government implement ?
explain why
suppose the government cant accurately measures and monitor the pollution emissions from each polluter but it...
Company A, the polluter, is located upstream of Company B, the victim, on a certain river. A productive activity pollutes the water, thereby negatively affecting the value of water to B. In the beginning, before regulation, emissions are E = 96. A’s marginal abatement cost is MAC = 50−A/2, where A is the amount of emissions abatement. B’s marginal abatement damages are MPD = A/3. a. If polluter A has the right to the river, what is the total damage...
Assume that a firm has the following marginal benefit of pollution (denoted E for emissions, measured in tons): MB=150-5E Q: How much would this firm pollute if pollution is unregulated? The government would like to reduce pollution from this amount by 12 tons and so implements a quantity constraint at the quantity in part (a) minus 12. What is the cost to this firm of reducing pollution by 12 tons? What tax would encourage this polluter to reduce pollution by...
Consider a pulp mill that emits air and water pollution emissions (E) that impose negative external costs (damages) onto society. The aggregate marginal abatement cost (MAC) and marginal damage (MD) curves have been estimated follows: MAC = 800 − 20E MD = 20E a. On a diagram, plot the MAC and MD curves. Be sure to label the curves, calculate the vertical intercept and horizontal intercepts of the MAC line, and the intersection point of the two lines. Show all...
Suppose you have 2 polluting sources in a region. With the objective to mitigate pollution, the government sets emissions limits as 10 units per company (Ast). As a market oriented policy, the government imposes an emission charge of $10 per unit (MT 10) of tax after MT MAC condition is met. The following functions are calculated for both polluters Polluter 1: MAC1 4.0(A1) Polluter 2: MAC2 2.4(A2) Total tax per pollutert(Ast - Ao) Where Ao Actual units abated The graphs...
A manufacturing plant emits air pollution when producing output. Suppose the marginal benefit (MB) of reducing air pollution to society is MC 360 MB 300-Q EMC The government expects the marginal cost (EMC) of reducing air pollution for the manufacturing plant to be о 270 240 EMC Q E 210 However, the actual marginal cost of reducing air pollution for the plant is $60 higher per unit. D 180 15 What emissions fee would the government set to reduce the...
Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation. 2. The government allocates tradable pollution permits. Each firm faces different costs, so reducing pollution is...
5. Correcting for negative externalities - Regulation versus tradable permits Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation. 2. The government allocates tradable pollution...
2 Pollution Control There are three coal plants, currently emitting 120 units of coal emissions. The government determines they wish to cut emission in half to 60 units total across the three plants. Each plant has their own total control C costs for emissions: TC and marginal costs of: gi MC where q is the amount of emissions reduced per plant. 1. The gove nment requires each plants to reduce emissions by 20 units to achieve the new standard. What...
Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation 2. The government allocates tradable pollution permits. Each firm faces different costs,...
Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation. 2. The government allocates tradable pollution permits. Each firm faces different costs,...