a. Under a strict command-and-control framework, suppose abatement standards are set equally across polluters. Assume the total
Question:
a. Under a strict command-and-control framework, suppose abatement standards are set equally across polluters. Assume the total abatement target is set at 30 units. Show the cost implications using three graphs, each of a different polluter with a unique MAC curve drawn to depict a low-cost abater, a moderate cost abater, and a high-cost abater. On each graph, identify the abatement level corresponding to a uniform standards approach, and show the level of MAC at that point and the area corresponding to TAC.
b. Now, refer directly to your model, and summarize what would happen qualitatively to the abatement levels of each firm if the equimarginal principle of optimality were used. Explain intuitively why this method would be cost-effective.
Step by Step Answer:
Environmental Economics and Management Theory, Policy and Applications
ISBN: 978-1111826673
6th edition
Authors: Scott J. Callan, Janet M. Thomas