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EC238 (54)
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Chapter 11

Chapter 11 EC238.docx

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Wilfrid Laurier University
Karen Huff

EC238 Chapter 11 - Standards Week 6 Types of Standards -Any action you can tin of could be the subject of a standard, but in environmental matters there are three main types of standards: ambient, emission, and technology Ambient Standard -Ambient standard - a never-exceed level for a pollutant in the ambient environment -Ambient standards are normally expressed in terms of average concentration levels over some period of time Emission Standards -Emission standards are never-exceed levels applied directly to the quantities of emissions coming from pollution sources -Emission standards can be set on a wide variety of different bases – ex. Km/hour, parts per million, % removal of waste material before discharge -Emission standards are a type of performance standard Technology Standards -Ex. The requirement that cars be equipped with seat belts is a technology standard -A performance standard, sets a constraint on some performance criterion and then allows people to choose the best means of achieving it -A technology standard actually dictates certain decisions and techniques to be used, such as particular equipment or operating practices to be used by polluters The Economics of Standards -Understanding the way standards work help us examine the costs of reaching a socially efficient equilibrium using this policy instrument Setting the Level of the Standard in Practice -It is hard to determine where to set the standard -Standards are often set by examining a narrow criteria -Standards emanate from a political/administrative process that may be affected by all kinds of considerations -Either a standard is met or it isn’t -If a standard isn’t met, the implication is that it should be, regardless of the cost of doing so -If a standard is being met, the implication is that it is not necessary to do any better, even though the cost of doing so may be low Uniformity of Standards -A very practical problem in standard setting is whether standards should be applied uniformly to all situations or varied according to circumstances -A single uniform standard cannot be efficient simultaneously in two regions -A way to avoid this is to set different standards in different regions – individual standards -A transfer coefficient converts emissions from source I into an impact on environmental quality at site j -When marginal damages for a pollutant vary by region, time of day, or season, a uniform standard will not be socially efficient. Individual standards that set the MAC equal to each MD are socially efficient Standards and the Equimarginal Principle -Cost-effective equilibrium – the total costs of compliance are minimized for a given emissions target -A major problem with standards is that there is almost always an overwhelming tendency for authorities to apply the same standards to all sources -Uniform standards will be cost-effective only in the unlikely event that all polluters have the same EC238 Chapter 11 - Standards
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