EC238 Chapter Notes - Chapter 10: Coase Theorem
Document Summary
Week 6: that the polluting material was a direct cause of their damage, and, that the material did in fact come from the specific defendant that appears in court. To be liable for some behaviour is to be held responsible for whatever untoward consequences result from that behaviour. Compensation requires that those causing the damage compensate those damages in amounts appropriate to the extent of the injury. Questions of liability and question are usually worked out in the courts. The courts will also decide the value of the damages. One approach to environmental issues is to rely on liability laws this make polluters liable for the damages they cause. Liability laws can lead to the socially efficient level of pollution because they provide an incentive for polluters to reduce emissions so as to minimize their total costs total abatement costs plus compensation to pollutees. Strict liability holds people responsible for damages regardless of circumstances.
