Econ 131 lecture 7

Econ 131 lecture 7 - Announcement Green Initiative Fund...

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Announcement Green Initiative Fund grants available for on- campus sustainability projects: Deadline Oct. 28 studentsustainability.ucsd.edu/green-fund Reading/Next Week Today: Policies to control environmental externalities (Ch. 8) Next week: Tuesday: End of policy segment (Ch.9) Thursday: Climate change part I
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Review: Two Main Types of Policy Market based Pollution taxes or fees, the Pigouvian solution Direct regulation Force polluters (using ±nes or criminal penalties) to lower emissions to the optimal level of abatement The Pigouvian Tax Supply’= PMC +tax
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Pigouvian Tax The price to suppliers (P* minus the tax) falls some relative to P M , but not by the whole amount of the tax Similarly, the price for consumers (P*) is somewhat higher than P M , but again not by the full amount of the tax The burden of the tax is shared based on the slopes of the demand and supply curves This is a corrective tax, the externality that caused
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This note was uploaded on 01/30/2012 for the course ECON 131 taught by Professor Groves during the Spring '09 term at UCSD.

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Econ 131 lecture 7 - Announcement Green Initiative Fund...

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