Review Questions
General
Model of Pollution Control
1. What
information does a marginal damage function convey?
2. What
information does a marginal abatement cost function convey?
3. Why does
efficiency frequently lead to solutions in which some pollution remains?
Federal Air Pollution Control Policy / CO2 Emissions Trading
1. How does the
Clean Air Act (CAA) define attainment and non-attainment counties?
2. What does the
term “standards” mean under the CAA?
3. How are
standards for specific pollutants determined under the CAA?
4. What regulatory
mechanisms kick in once a county is declared non-attainment?
5. What does the data
reviewed in class indicate about the affect the CAA has on the geographic
distribution of production?
6. What pollutant
is the primary cause of Acid Rain?
Identify the economic activity that is a large source of the
pollutant.
7. Why was the
county-based emphasis of the original Clean Air Act ineffective in addressing
the Acid Rain problem?
8. Why is Acid
Rain more of a problem in the Northeast than in the rest of the country?
9. Describe the
pollution trading program implemented by the EPA to deal with Acid Rain.
10. How is pollution
trading supposed to decrease the total social cost of abating pollution?
11. What is meant by
“banking” pollution credits? How does
banking influence the firm’s pollution abatement and trading behavior?
Air Quality
in Los Angeles
1. Describe a
temperature inversion. What is the
relationship between temperature inversions and air quality?
2. Describe the
air quality alert system in Los Angeles County
3. What is the
SCAQMD and what is its role?
Efficiency
and Equity in Pollution Control
1. What is the
difference between the equity and efficiency of public policy?
2. Be able to evaluate data quantifying the equity and
efficiency of alternative environmental policies.
3. Be able to
interpret statistics on the relationship between demographics and the geography
of emissions in Los Angeles County.
Review Problem:
Below are the marginal
abatement costs for three firms.
A.
What is the cost for each firm to reduce emissions from 6 to 5 tons? From 5 to 4 tons?
B.
What is the total cost of each firm decreasing its emissions down to 5
tons? 4 tons?
C.
If each firm were charged $8 tax per pound of emissions, how many tons
would each firm emit per week?
D.
Why would the tax generate less abatement cost across the firms than an
emissions standard requiring each firm to decrease emissions by 5 tons/week?
Suppose each firm were given
5 tons of tradable rights.
E.
If Firm 1 transacted with Firm 3, which would likely be the buyer?
F.
What would be the possible terms of trade?
The Global
Environment
1. What
role does the ozone layer in the upper atmosphere play?
2. What
are the external costs of the economic activity that diminishes the ozone
layer?
3. What
gas primarily contributes to the greenhouse effect?
4. What
human activities are contributing to global warming?
5. What
are some of the ecological effects of global warming?
6. Be able to interpret the relationship:
A country’s total CO2
production = Population × GDP/Pop × Energy/GDP × CO2/Energy
7. How did trade in used cars between Mexico and
the US contribute to an increase in greenhouse gas emissions?