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A Pedagogical Note on Modeling the Economic Benefit of Emissions Abatement vs. the Economic Harm from Emissions

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  • Christopher S. Decker

Abstract

The number of undergraduate-level textbooks on environmental economics has increased in recent years, but the textbook treatment of optimal emissions (abatement) varies markedly from textbook to textbook. In particular, there is no consensus as to whether to model the economic “bad” (i.e. emissions) or the economic “good” (abatement). This inconsistency can lead to some needless confusion for students introduced to environmental economics for the first time, particularly those students outside of the formal economics major, such as students of business administration and public policy. As a means of mitigating this confusion, I propose a simple example that instructors can use in lecture, test question, or student assignment format, that illustrates the duality between modeling emissions and abatement.

Suggested Citation

  • Christopher S. Decker, 2012. "A Pedagogical Note on Modeling the Economic Benefit of Emissions Abatement vs. the Economic Harm from Emissions," Journal for Economic Educators, Middle Tennessee State University, Business and Economic Research Center, vol. 12(1), pages 1-6, Fall.
    • Handle: RePEc:mts:jrnlee:v:12:y:2012:i:1:p:1-6
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    File URL: http://frank.mtsu.edu/~jee/2012/1_MS611_pp1to6.pdf
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    References listed on IDEAS

    as
    1. Andrew J. Yates, 1998. "The Equal Marginal Value Principle: A Graphical Analysis with Environmental Applications," The Journal of Economic Education, Taylor & Francis Journals, vol. 29(1), pages 23-31, March.
    2. Leo H. Kahane, 2002. "Rice, Salmon or Sushi? Political Competition for Supply of a Regulated Input," The American Economist, Sage Publications, vol. 46(1), pages 22-28, March.
    3. Jay R. Corrigan, 2011. "The Pollution Game: A Classroom Game Demonstrating the Relative Effectiveness of Emissions Taxes and Tradable Permits," The Journal of Economic Education, Taylor & Francis Journals, vol. 42(1), pages 70-78, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    environmental policy; optimal abatement; optimal emissions; duality; social welfare;
    All these keywords.

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • A23 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Graduate
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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