2008_04_03_Notes - UP FRONT, 4-3-08 Reading for next time:...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
UP FRONT, 4-3-08 Reading for next time: Look for email. How many of you have studied risk aversion? Outline for Today 1) Incentive-based regulations vs. command and control 3) “The Ratchet Effect” and rational response of firms 4) Emission fees vs. emission abatement subsidies 5) Introduction to cost-benefit analysis
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Advantages of Economic Incentives (Fees, Marketable Permit Programs, Liability) Advantages of Command and Control
Background image of page 2
“Knowledge spillover:” If one firm tries something, others learn from it This is a positive externality. As a result, companies tend to put less than socially optimal effort into research, development, and deployment of new technologies. This tends to be true even in the presence of a Pigovian fee or similarly stringent cap-and-trade program on environmental impacts. Government can internalize this externality by subsidizing
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/19/2009 for the course AEM 4510 taught by Professor Shawhan,d. during the Spring '08 term at Cornell University (Engineering School).

Page1 / 6

2008_04_03_Notes - UP FRONT, 4-3-08 Reading for next time:...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online