Chapter 11: Regulating Pollution
Rational For Regulation
- Public interest theory (normative theory) p.219
1. Imperfect of completion
2. Imperfect of information – GMO labeling
3. Public goods/bads
- Interest group theory (positive theory)
Maintains that rent seeking is the primary rationale for regulation
1. Imperfect link between parliament/regulator and the pollution generating activity.
Time delays, cheating
Principal – agent problem -> moral hazard and conflict of interest
2. Legislature does not necessarily act as an efficient benevolent maximize of social well-being.
Basic Regulatory Instruments
A. Prescriptive Regulations/Command and Control Regulation
Regulator specifies the steps for the individual polluters to take
Regulator collect the information necessary to decide the physical actions
Pollution control equipment requirement or specify an emission limit.
E.g. Ontario’s “Drive Clean” program identifies vehicles that don’t meet provincial stds. For NO, VOC, CO.
Simplicity in regulating complex processes (flexibility in regulating complex environmental processes)
Easy monitoring and compliance ( much greater certainty in how much pollution will result from
Maybe costly to administers
Reduced incentives to find better ways to control pollution
Inefficiency pollution control are not equalized; Difficulty in satisfying t