Chapter 12: Q.30 (page 297)
Would environmentalists favor command-and-control policies as a way to reduce pollution? Why or why not?
Yes, Environmentalists favor command and control policies as laws are made under these policies are very effective.
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Recycling is a relatively inexpensive solution to
much of the environmental contamination from plastics,
glass, and other waste materials. Is it a sound policy to
make it mandatory for everybody to recycle?
Classify the following pollution-control policies as command-and-control or market incentive-based.
a. A state emissions tax on the quantity of carbon emitted by each firm.
b. The federal government requires domestic auto companies to improve car emissions by 2020.
c. The EPA sets national standards for water quality.
d. A city sells permits to firms that allow them to emit a specified quantity of pollution.
e. The federal government pays fishermen to preserve salmon.
A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals
to clear some of Sherwood’s forest and grow corn, but obtaining this additional economic output will have an environmental cost from reducing the number of trees. Table 12.11 shows possible combinations of economic output and environmental protection.
a. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the number of trees, and the quantity of economic output, measured in corn, on the vertical axis.
b. Which choices display productive efficiency? How can you tell?
c. Which choices show allocative efficiency? How can you tell?
d. In the choice between T and R, decide which one is better. Why?
e. In the choice between T and S, can you say which one is better, and why?
f. If you had to guess, which choice would you think is more likely to represent a command-and-control
environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice Q or S? Why?
What is a pollution charge and what incentive does it provide for a firm to take external costs into account?
What is a marketable permit and what incentive does it provide for a firm to account for external costs?
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