4015473
Description
Mind Map by rain.tian000112, updated more than 1 year ago
More
Negative externality
of production by Rain,
Harry, and Edward
- Remedies
- Market-based solution
- Imposing taxes eg. taxes
on cigarettes, green taxes
on polluting firms
- Tradeable pollution permits
(Cap and Trade system)
- Licences to pollute a specific amount
that the government allocates to
polluting firms that are tradable in the
open market.
- PROS
- The limit of pollution is set
- Incentive to create more
green and efficient firms
- Loss of output is smaller than if the government
splits the total level of pollution up into same
amount for all firms.
- The limit of pollution is set
- CONS
- not reduce pollution
- difficulty in determining
the initial allocation
of permits
- not reduce pollution
- PROS
- Licences to pollute a specific amount
that the government allocates to
polluting firms that are tradable in the
open market.
- Imposing taxes eg. taxes
on cigarettes, green taxes
on polluting firms
- Command-and-control solutions
- Direct regulation: regulate
output, prices, location,
operating hours of production
as well as who has the right
to drink or smoke and
- Exa
- Exa
- Direct regulation: regulate
output, prices, location,
operating hours of production
as well as who has the right
to drink or smoke and
- Advertising (or banning of), or moral
suasion, education
- Market-based solution
- Market failure
- Problems?
- Lower price, more quantity
- Over-consumption
and over-supply
- Inefficient allocation of
resources
- Inefficient allocation of
resources
- Over-consumption
and over-supply
- Lower price, more quantity
- Effect?
- Threats to Sustainability
- Welfare Loss
- Threats to Sustainability
- Problems?
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