Question

What are the three problems that economists have noted with regard to command-and-control regulation?

Short answer

1) They provide no incentive to go beyond the limits they set.

2)They provide limited flexibility in terms of where and how pollution might be reduced.

3)They are frequently loaded with politically driven loopholes.

Step-by-step solution

Command-and-control regulation :

The enforced environmental policy is directed by command-and-control policy. It depicts a certain form of regulation.

Three problems regarding to command-and-control regulation are :

1. Regulation based on command and control provides little incentive to enhance environmental quality beyond the standard set by a specific statute. Polluters have little motivation to improve after they reach the benchmark.

2. Regulation based on command and control is rigid. Meeting the criteria may be challenging and costly for businesses. Firms have no motivation to fundamentally rethink their manufacturing practices in order to minimize pollution even more and at a lower cost.

3. Politically driven loopholes are common in real-world rules.