EC238 Lecture Notes - Lecture 7: Essar Steel Algoma, Mcgraw-Hill Education, Vale Limited
Document Summary
In this lesson we will learn how an ambient emissions standard widely used in the. Chapter 11 looks at standards which represent a fully centralized solution to environmental externalities, where the government, rather than individual polluters decides what is to be done. We refer to standards as a type of command-and-control (cac) policy because the government directly regulates the behavior of the regulated firms. Once again, as with the decentralized approaches we looked at in the last lesson, standards have advantages and limitations. We also introduce the concept of a bubble policy which allows firms with more than one facility to meet an emissions standard by decreasing emissions at some facilities and increasing emissions at others. Bubble standards or bubble trading has been employed in ontario and in the us by the environmental protection. Agency and it is an important concept not addressed in the textbook.
