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Pollution Control Measures - Essay Example

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Following the Kyoto Protocol that called for the nations to reduce the amount of environmental pollution, a number of control measures are applied. The three major control measures that are adopted by nations include tradable emission permits, taxes and legal regulatory measures…
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Pollution Control Measures
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Pollution Control Measures

Download file to see previous pages... Consequently, this paper explores the merits of the three pollution control measures to establish the optimal pollution control measure that should be adopted by the countries. Discussion Benefits and marginal costs are compared to establish the amount of pollution that should be accepted in society. This is called the optimal pollution level, where the marginal social costs and marginal social benefits are equal. Similarly, the marginal cost of pollution damage and the marginal cost of pollution control are compared to establish when pollution control measures should be employed. Under this concept, pollution should be reduced if the benefits gained are higher than the control costs (Hoel, 1998). This is as demonstrated in the graphical representation below on the marginal cost of pollution damage versus the marginal cost of pollution control. Qmax in the graph above shows the maximum level of pollution that is expected when pollution control measures are not employed. Thus, the pollution amount will drop from Qmax when the control policies are introduced in the market. On the other hand, MCD is the marginal cost of damage that is caused by pollution emissions. Similarly, MCC is the marginal cost of control that has the tendency of rising as the levels of pollution fall (Hoel, 1998). The optimal control level is represented by the Q* in the graph, where the MCD and MCC are equal. This is the level at which the pollution control cannot be exceeded since the benefits will be less than the marginal cost of undertaking the pollution control measure. This practice of balancing the marginal cost and benefit is known as the equimarginal principle (Hoel, 1998). Legal regulation is one of the pollution control measures employed by government agencies, which involves setting the emission standards for specific products or industries under the legislative guideline. The major advantage of legal regulation is that it specifies results compared to other control measures (Weyzig, 2009). Thus, it is possible to ensure that producers do not allow a risky level of pollutants. However, this control measure has the potential of experiencing inflexibility when the economic players are required to meet the same standard. This can only work where activities polluting the environment are same. Consequently, pollution tax is effective in an industry that has numerous and different plants. This will involve charging the plants by per unit of emission they make in their production activities. Taxation will be effective in controlling the level of emission since the plants operating in the market will consider reducing the pollution level provided the marginal cost is lower compared to the tax (Tucker, 2011). Under the taxation control measure, the Qmax of pollution before the pollution control measures are introduced will shift to Q1, as reflected in the graph below, when a pollution tax of T1 is introduced. This is because the manufacturers in the market will prefer to lower their pollution level by undergoing a cost E shown in the graph, instead of paying a tax that is equal to F + E for these units as reflected in the graph above (Tucker, 2011). In addition, the manufacturers will be forced to pay a charge equivalent to B + D for the pollution level of Q1 they cause. This cost is lower than B+ D – E+ F that they will be required to pay if they do not reduce their pollution l ...Download file to see next pagesRead More
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