Chapter 12: Q.33 (page 297)
Is zero pollution possible under a marketable permits system? Why or why not?
Yes, it's possible.
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An emissions tax on a quantity of emissions from a firm is not a command-and-control approach to reducing pollution. Why?
Consider two ways of protecting elephants from poachers in African countries. In one approach, the government sets up enormous national parks that have sufficient habitat for elephants to thrive and forbids all local people to enter the parks or to injure either the elephants or their habitat in any way. In a second approach, the government sets up the national parks and designates villages around the edges of the park as official tourist centers that become places where tourists can stay and bases for guided tours inside the national park. Consider the different incentives of local villagers - who often are very poor - in each of these plans. Which plan seems more likely to help the elephant population?
What is a pollution charge and what incentive does it provide for a firm to take external costs into account?
As the extent of environmental protection expands, would you expect marginal costs of environmental protection to rise or fall? Why or why not?
What are the economic tradeoffs between low-income and high-income countries in international conferences on global environmental damage?
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