ECN E102 Lecture Notes - Lecture 19: Environment And Climate Change Canada, Social Cost, Externality
Document Summary
Command-and-control policies: regulation would be impossible to prohibit all polluting activity. Government can make certain behaviours either required or forbidden. In most cases of pollution, however, the situation isn"t this simple because it. Society has to weigh the costs and benefits to decide the kinds and quantities of. Environment canada can dictate a maximum level of pollution that a pollution it will allow factory may emit, or they can require that firms adopt a particular technology to reduce emissions. To design good rules, government regulators need to know the details about specific industries and about the alternative technologies that those industries could adopt, which is information that is difficult to obtain. This approach is difficult to administer and isn"t efficient because both high-cost and low-cost producers have to reduce their output. Used to align private incentives with social efficiency. Corrective taxes: taxes enacted to correct the effects of negative externalities; also called pogovian taxes after economist arthur pigou.
