ENV221H1 Lecture Notes - Lecture 5: Ecotax, Market Failure, Externality
Document Summary
Unintentional side effects to people not directly involved: eg. pollution, scarcity issues. Market failure solutions: government intervention through legislation or regulation or taxes. Pigovian taxes: taxing behavior that is not favorable, eg. taxing cigarettes: market approach (eg. taxes and incentives) because of flexibility of markets. Approach and tools: voluntary info campaigns, education, policy makers don"t want to seem too aggressive or the people will see them in a negative light. Permit trading eg. emission trading in a cap and trade system: given right to pollute a certain amount, but that right can be traded if you do not pollute as much as you are allowed. This is a flexible method: generally preferred by economists since it is considered more efficient. Production, distribution and consumption of goods and services, or the material welfare of human kind. Cost and benefit at alternative environmental policies to deal with air pollution, water quality , toxic substances, solid waste and global warming.
