Study with the several resources on Docsity
Earn points by helping other students or get them with a premium plan
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Community
Ask the community for help and clear up your study doubts
Discover the best universities in your country according to Docsity users
Free resources
Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors
The economic principles behind setting pollution targets, focusing on efficiency, cost-effectiveness, sustainability, human health impacts, and political feasibility. It also discusses the concepts of residual flows, stock damage, and the efficient level of pollution. Insights into the importance of considering both flow and stock pollution damages, as well as consumer tastes and preferences.
Typology: Slides
1 / 12
This page cannot be seen from the preview
Don't miss anything!
AEC 829 1
Targets
AEC 829 2
Based on efficiency
Cost-effectiveness
On Sustainability
On impacts on human health
Acceptability, Political feasibility
Treaty Obligations
AEC 829 3
What does economics have to say about determining pollution targets?
AEC 829 4
Volume and makeup of the pollutant Remaining assimilative (or absorptive) capacity of environmental media Characteristics of affected ecosystems Number, location of human population Exposure and dose Tastes and Preferences of Affected People
AEC 829 5
Economic Activity
Emission Flows Into Environmental Media
Absorption Non absorption offlows
AEC 829 6
Non absorbed Emission Flows
Accumulation of Pollutant Stock
Degradation of Stock Into harmless forms
Stock Pollution damage
AEC 829 10
Stock Pollution Damage
Flow Pollution Damage
Pollution Damage
Consumer Tastes and Preferences The Value of Pollution Damage
AEC 829 11
Assume independent of time or source Efficient level of emissions is one that maximizes the net benefits of pollution. (i.e. Maximizes (B-C) Same as where MB= MC Same as minimizing the sum of abatement and damage costs =s internalizing the externality
AEC 829 12
Absolute Health Criterion Threshold Affects
AEC 829 13
All environmental objectives come at a cost.
Porter Hypothesis—induced technical change (win-win)
AEC 829 14
Double dividends—revenues earmarked (ring-fenced) to reduce taxes
Elimination of inefficiencies—not originally on the efficiency frontier
AEC 829 15
Pollution Control where damages are a fn (location of emissions) Case I: Uniform mixing Spatial distribution is uniform Can use flow model
AEC 829 19
Rate of change of Pollutant stock over time (dA/dt) is equal to the pollution flow (Mt ) minus a pollution decay rate: α
When α is zero = no decay and perfectly persistent pollutant is present
AEC 829 20
Damages continue indefinitely
E.g., DDT, Dioxin, Radio nuclides
AEC 829 21
0< α < 1 Very slow rates of decay to instantaneous rates of decay If 1 = flow Efficient targets must be derived from intertemporal analysis.
AEC 829 22
Want to maximize the discounted net benefits over some suitable time horizon Obtain not an efficient stock pollution amount, rather A trajectory (or time path) of emission levels over time
AEC 829 23
MB will be a function of location of receptors (e.g. people) relative to emissions/effluent
Uniform mixing or not which is a function of weather and topography
Timing of release
Life span of pollutant (decay rate— and whether constant or not)
AEC 829 24
Decay rate can have a threshold effect (e.g. Very high and then zero)
The discount rate of consumption
AEC 829 28
R= 0 implies time has no value
Collapses into flow case
AEC 829 29
R>0 and α > Imperfectly persistent pollutant The smaller is the decay rate, α , the larger will be the efficient ambient pollution level The larger the discount rate, r, the higher is the efficient amount of emission per time period (i.e. reduces the PV of future damages) As r increases, the MD rotates to the northeast
AEC 829 30
Perfectly persistent pollutant
Only level efficient is zero, but have to use optimal control theory to decide what date pollutant emissions set to zero
AEC 829 31
Failure to recognize nonconvexity, irreversibility, threshold effects can lead to wrong solution of efficiency allocations Models to estimate Engineering Economic models Engineering-economic models CGE (Computable general equilibrium models) Integrated Energy-Economic models
AEC 829 32
Problems in knowing either MD or MB Rejection of efficiency criteria Safe Minimum Standard Precautionary approach Cost effective approach
AEC 829 33
What is goal if want to maximize net social benefits and accept initial allocation of resources?
