9 The Efficient Amount of Pollution Abatement E MSB MSC Marginal Social Cost

9 the efficient amount of pollution abatement e msb

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Figure 3.9 The Efficient Amount of Pollution Abatement E MSB MSC Marginal Social Cost and Benefit Percent Reduction in Wastes Emitted per Year 0 A * 100
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Regulatory Solutions Instead of using market forces to cause firms to internalize externalities we can use emission standards and apply these to all.
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Figure 3.10 Regulating Emissions: Losses in Efficiency From Differences in the Marginal Social Benefit of Emissions A MEC = MSC MSB MEC = MSC MSB B C F Q RB Q RA G H 0 Q R 10 Firm A 10 Cost and Benefit (Dollars) Firm B Q* A Q* B Q B 1 Q B 1 Tons of Emissions per Year
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Figure 3.11 Losses in Efficiency From Emissions Standards When MEC Differs Among Regions MEC = MSC MSB MEC = MSC S Y Z T R X Q RD Q RC Firm C Tons of Emissions per Year Firm D 20 Q* C Q R Q* D Q R Cost and Benefit (Dollars)
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Sulfur Dioxide Emission Prices SOURCE: United States Environmental Protection Agency 250 200 150 100 50 0 8/1/94 Allowance Price (Dollars) Month/Year 8/1/95 8/1/95 8/1/95 8/1/95 8/1/95 Fieldston Publications Price Index Cantor Fitzgerald Market Price Index
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Global Externalities CFC’s Deforestation Global Warming
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