Standards: standards are a government designed or centralized policy, emissions standard = a maximum rate of emissions legally allowed. standard. E: firms pay tac only, called the compliance costs, violators are fined. Types of standards: ambient standards = maximum levels of pollutants in the ambient environment, generally set as monthly or yearly averages, e. g. Average so2 levels should not exceed 23 parts per billion each year: emissions standards = maximum emissions from specific sources, e. g. limits on g/hour, total per unit of output, or concentrations per unit of input, e. g. Air care: technology standards = a certain technology is required by law, e. g. California: can also be design or engineering standards, product or input standards, e. g. unleaded gasoline. 3: or the government could define a maximum amount of total damages, then the emissions depend on the marginal damages. Mdr = 0. 25e and an urban area has mdu = 0. 5e.