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Determining optimal air quality standards: Quantities or prices?

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  • Halkos, George

Abstract

In this study, a basic comparison between the Pigouvian and the Coasean approaches is carried out in order to discuss and comment on the mechanisms by which externalities are resolved. Environmental control approaches are examined and compared in terms of minimization of abatement costs, development of new technologies, revenue-generating capacity, complexity, popularity, incentives to cheat and inflation and adjustment costs. It seems that economic instruments have several advantages over regulations: they are less rigid and static, they are cost-effective, provide a source of finance and encourage innovation. However, market mechanisms do not invalidate regulatory approaches; they are, and must be, an adjunct to them.

Suggested Citation

  • Halkos, George, 2000. "Determining optimal air quality standards: Quantities or prices?," MPRA Paper 42849, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:42849
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    File URL: https://mpra.ub.uni-muenchen.de/42849/1/MPRA_paper_42849.pdf
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    References listed on IDEAS

    as
    1. Martin L. Weitzman, 1974. "Prices vs. Quantities," Review of Economic Studies, Oxford University Press, vol. 41(4), pages 477-491.
    2. Jaffe, Adam B. & Newell, Richard G. & Stavins, Robert N., 2003. "Chapter 11 Technological change and the environment," Handbook of Environmental Economics,in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 11, pages 461-516 Elsevier.
    3. Hoel, Michael, 1991. "Global environmental problems: The effects of unilateral actions taken by one country," Journal of Environmental Economics and Management, Elsevier, vol. 20(1), pages 55-70, January.
    4. Hettelingh, Jean-Paul & Hordijk, Leen, 1986. "Environmental Conflicts: The Case of Acid Rain in Europe," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 20(3), pages 38-52, November.
    5. Halkos, George, 1993. "An evaluation of the direct costs of abatement under the main desulphurisation technologies," MPRA Paper 32588, University Library of Munich, Germany.
    6. Besanko, David, 1987. "Performance versus design standards in the regulation of pollution," Journal of Public Economics, Elsevier, vol. 34(1), pages 19-44, October.
    7. Helm, Dieter & Pearce, David W, 1990. "Assessment: Economic Policy towards the Environment," Oxford Review of Economic Policy, Oxford University Press, vol. 6(1), pages 1-16, Spring.
    8. Oates, Wallace E & Portney, Paul R & McGartland, Albert M, 1989. "The Net Benefits of Incentive-Based Regulation: A Case Study of Environmental Standard Setting," American Economic Review, American Economic Association, vol. 79(5), pages 1233-1242, December.
    9. Newbery, David M G, 1990. "Acid Rain," CEPR Discussion Papers 442, C.E.P.R. Discussion Papers.
    10. George Halkos & John Hutton, "undated". "Acid Rain Games in Europe," Discussion Papers 93/12, Department of Economics, University of York.
    11. Tietenberg, T H, 1990. "Economic Instruments for Environmental Regulation," Oxford Review of Economic Policy, Oxford University Press, vol. 6(1), pages 17-33, Spring.
    12. Halkos, George, 1993. "Economic incentives for optimal sulphur abatement in Europe," MPRA Paper 33705, University Library of Munich, Germany.
    13. George Halkos, 1994. "Optimal abatement of sulphur emissions in Europe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(2), pages 127-150, April.
    14. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
    15. Halkos, George E., 1993. "Sulphur abatement policy: Implications of cost differentials," Energy Policy, Elsevier, vol. 21(10), pages 1035-1043, October.
    16. Halkos, George, 1994. "A game-theoretic approach to pollution control problems," MPRA Paper 33259, University Library of Munich, Germany.
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    Cited by:

    1. Halkos, George, 2013. "Uncertainty in optimal pollution levels: Modeling the benefit area," MPRA Paper 47768, University Library of Munich, Germany.

    More about this item

    Keywords

    Pollution; Economic instruments; Abatement costs; International cooperation;

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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