THE ROLE OF ECONOMIC INCENTIVES IN POLLUTION AND ABATEMENT

The cause of pollution is examined and a hypothetical example is used to illustrate the concepts of private cost and external cost, and why firms seek the cheapest ways of production and disposal of waste (i.e. by polluting). The economists solution to the problem is presented and ineffective methods of controlling pollution which have been passed into law are examined. It is suggested that if a tax is placed on the emission of pollutants, economic incentives are then given to pollution abatement. The cost minimizing economic behavior is then turned toward abatement in order to avoid the tax. A pollution tax will diminish pollution in two ways: it will raise the price of dirty methods of production, thus forcing the consumers to choose the product which involves less pollution; it will encourage the installation of abatement devices. Such a tax would also encourage engagement in research and development in pollution abatement technology. The tax would also provide government agencies with a source of revenue with which to administer pollution abatement programs.

  • Supplemental Notes:
    • Twentieth Annual Meeting held at University of Arizona, April 15-16, 1971.
  • Corporate Authors:

    University of Arizona, Tucson

    Transportation and Traffic Institute
    Tucson, AZ  United States  85721
  • Authors:
    • Wenders, J T
  • Conference:
  • Publication Date: 1971

Media Info

  • Pagination: p. 9-17

Subject/Index Terms

Filing Info

  • Accession Number: 00262894
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Nov 20 1974 12:00AM