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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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    References listed on IDEAS

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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.

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    More about this item

    Keywords

    Pollution; Economic instruments; Abatement costs; International cooperation;
    All these keywords.

    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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