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EC238 (54)
Karen Huff (33)
Chapter 9

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Department
Economics
Course
EC238
Professor
Karen Huff
Semester
Fall

Description
EC238 Chapter 9 – Criteria for Evaluating Environmental Policies Week 6 Efficiency and Cost-Effectiveness -An efficient policy is one that moves us to, or near, eh point where marginal abatement costs and marginal damages are equal -To discover this we must know both costs and damages -When it is difficult or impossible to measure damages produced by environmental degradation, the socially efficient level of emissions cannot be determined with certainty -A policy is cost-effective if it produces the maximum environmental improvement possible for the resources being expended or, equivalently, it achieves a given amount of environmental improvement at the least possible cost -If programs are not cost-effective, the policy-makers and administrators will be making decisions using an aggregate abatement cost function that is higher than it needs to be, leading them to set less restrictive targets in terms of desired amounts of emission reductions -Cost effectiveness: -is a key policy criterion when regulators cannot measure the MD curve -minimizes the total costs of reaching a given target level of environmental quality -allows society to achieve higher target levels of environmental quality than inefficient policies because of cost savings -Efficiency and cost-effectiveness are important because, although preserving environmental resources is critically important, it is only one of the ma
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