ECON 2D03 Lecture 2: Chapter 3 pt3
Document Summary
Standards: maximum levels of pollutants that are acceptable by law, firms that exceed these levels are punished. The agency: must first set the standards, then enforce them. It should continually explore new technical possibilities and evaluate its programs. Performance standard: specifies the required level of performance, but not the means of compliance, encourages research into new technologies. Design standard: specifies the required level of performance, and the means of compliance. Technology forcing standards: force firms to use specific pollution control technologies. Problem: techniques that could control pollution more cheaply are not being encouraged, developed, or used. Effluent fees: taxes on production causing water pollution. Emission fees: taxes on production causing air pollution. Effects: decrease the supply, consumers pay a higher price & consume less, firms have an incentive to look for least-cost techniques to cut pollution fees.
