November 15th- Lecture

November 15th- Lecture - November 15th Varying costs of...

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November 15th Varying costs of Abatement - reducing emissions with fuel economy is easier with a smaller car than a sudan, if we are aiming to reach abatement costs and they are different for different firms, abatement costs will not be equal to the damage that different firms produce. For some firms it will be higher, for some it will be lower. Other methods: - Price: why don't we just charge people for this externality? the idea of charging people through the tax system. 'Arthur Pigou' spent his life aimed at pricing through taxations "pigouvian taxation", gasoline taxation is to me pay for roads but also works as an externality for types of car driven and how much driving they do. - Basic idea: charge people the full social costs where should the right tax be? (graph) Setting the right tax: a way to reduce people's consumption because we are consuming too much without realizing the externalities. Firm pays one price, when Pfirm is lower than the Consumer Price, the consumers are paying a lot more for gas than the cost to
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This note was uploaded on 12/13/2011 for the course ENVR 201 taught by Professor Badami during the Spring '08 term at McGill.

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November 15th- Lecture - November 15th Varying costs of...

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