Travis Roach
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Environmental Economics

9/11/2012

 
This article from The Economist talks about one of the age old battles in environmental economics - command and control. As the article points out, when Texas originally implemented environmental legislation they were pretty slim on the details. Which do you think is a preferable policy: one that mandates a certain technology be used to clean up the environment by every firm, a tax on all pollution/emissions, a permit system that allows firms to buy "the right to pollute" a certain amount, or some hybrid? Will the EPA court loss result in a dirtier environment with more profits, or could the allowance of more flexibility be beneficial to the environment? Using supply and demand, if a certain technology had to be installed by all polluting firms what would happen to the equilibrium price and quantity of the good they sold?


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