NR326 – End Term Exam (Mental
Health) – A+ Level Answers
Pollution (EconDef) - ✔✔when the residual assimilation services of the environment are free and
unpriced
Pollution (Envm Def) - ✔✔- waste assimilating capacity of the environment exceeded
-pollution will not be reduced voluntary; requires coercion or and incentive for polluter to abate
Types of Pollution - ✔✔Point Source: a single, identifiable, localized source of air, water, thermal, noise
or light pollution (can be modeled as a point)
Non-point: pollution that cannot be traced back to a single origin or source such as run off water from
urban areas and failed septic systems
Pollution Vocabulary - ✔✔comply
abate
emissions (air) - Criteria Air Pollutants . ( Sox, Nox, PM, CO, Lead, O3)
effluent (water) - BMP
Point Sources (how to minimize them) - ✔✔1. Emission Standards - laws w/ fines for violation
2. Emission Charges - laws w/ charges
3. Taxes (Pigouvian Tax) - tax laws
4. Tradable Emission Point
NonPoint Source - ✔✔1. Cost-sharing
2.Mandated or Voluntary BMPs (best management practice)
Emission Standards - ✔✔a legal limit on the amount of pollutant a single source is allowed to emit
, Command and Control Approach - ✔✔-pass the law and people will comply
-lacking info on control (abatement) costs, regulatory agencies simply assigns each source an equal
amount of pollution reduction-- not cost effective
-Pros: simplicity, appealing politically
-Cons: fines come after the pollution , never enough police to catch the violators, always involves
litigation where lawyers are the winners and not the environment
Emission Charge - ✔✔a fee collected by the government levied of each unit of regulated pollutant
emitted by source
essentially as long as it costs you less to abate then it would to pay that charge you abate
Pigouvian Tax - ✔✔tax levied to abate pollution using the market
ie. CA gas tax
Steps:
1. Establish tax that adds to the firms marginal costs of production that creates pollution (Marginal
Private Cost)
2. Faced with higher Marginal Cost firms have and incentive to reduce output thereby reducing pollution
more effectively than with command and control
3.Total tax revenue to "state". revenue can be used by state to mitigate remaining pollution
4. Problem! Iack of information on how to set tax to efficient level ie. no knowledge of MSC, tax
revenues usually diverted to cover govt.
Coasian Market Solution: - ✔✔given a complete property rights, trade among involved parties will
eliminate Pareto-relevant externalities
Health) – A+ Level Answers
Pollution (EconDef) - ✔✔when the residual assimilation services of the environment are free and
unpriced
Pollution (Envm Def) - ✔✔- waste assimilating capacity of the environment exceeded
-pollution will not be reduced voluntary; requires coercion or and incentive for polluter to abate
Types of Pollution - ✔✔Point Source: a single, identifiable, localized source of air, water, thermal, noise
or light pollution (can be modeled as a point)
Non-point: pollution that cannot be traced back to a single origin or source such as run off water from
urban areas and failed septic systems
Pollution Vocabulary - ✔✔comply
abate
emissions (air) - Criteria Air Pollutants . ( Sox, Nox, PM, CO, Lead, O3)
effluent (water) - BMP
Point Sources (how to minimize them) - ✔✔1. Emission Standards - laws w/ fines for violation
2. Emission Charges - laws w/ charges
3. Taxes (Pigouvian Tax) - tax laws
4. Tradable Emission Point
NonPoint Source - ✔✔1. Cost-sharing
2.Mandated or Voluntary BMPs (best management practice)
Emission Standards - ✔✔a legal limit on the amount of pollutant a single source is allowed to emit
, Command and Control Approach - ✔✔-pass the law and people will comply
-lacking info on control (abatement) costs, regulatory agencies simply assigns each source an equal
amount of pollution reduction-- not cost effective
-Pros: simplicity, appealing politically
-Cons: fines come after the pollution , never enough police to catch the violators, always involves
litigation where lawyers are the winners and not the environment
Emission Charge - ✔✔a fee collected by the government levied of each unit of regulated pollutant
emitted by source
essentially as long as it costs you less to abate then it would to pay that charge you abate
Pigouvian Tax - ✔✔tax levied to abate pollution using the market
ie. CA gas tax
Steps:
1. Establish tax that adds to the firms marginal costs of production that creates pollution (Marginal
Private Cost)
2. Faced with higher Marginal Cost firms have and incentive to reduce output thereby reducing pollution
more effectively than with command and control
3.Total tax revenue to "state". revenue can be used by state to mitigate remaining pollution
4. Problem! Iack of information on how to set tax to efficient level ie. no knowledge of MSC, tax
revenues usually diverted to cover govt.
Coasian Market Solution: - ✔✔given a complete property rights, trade among involved parties will
eliminate Pareto-relevant externalities
