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.
- Twentieth Annual Meeting held at University of Arizona, April 15-16, 1971.
University of Arizona, TucsonTransportation and Traffic Institute
Tucson, AZ USA 85721
- Wenders, J T
- Publication Date: 1971
- Pagination: p. 9-17
- TRT Terms: Air quality management; Costs; Development; Economic factors; Environmental impacts; Equipment; Laws; Pollutants; Pollution; Pollution control; Production methods; Research; Revenues; Taxation
- Uncontrolled Terms: Abatement; Research and development
- Old TRIS Terms: Economic considerations
- Subject Areas: Economics; Environment; Finance; Highways; Law; Research; Society;
- Accession Number: 00262894
- Record Type: Publication
- Files: TRIS
- Created Date: Nov 20 1974 12:00AM