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Author Question: What is a potential disadvantage of emissions taxes versus direct pollution controls? (Read 23 times)

booty5

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on: Oct 12, 2022
What is a potential disadvantage of emissions taxes versus direct pollution controls?
◦ Emissions taxes introduce distortions to the price system, whereas direct controls do not.
◦ The authorities might have a better idea of the socially optimal level of pollution than of the optimal tax rate that would achieve it.
◦ Pollution becomes a part of each firm's profit-maximizing calculations, encouraging firms to find more efficient ways to pollute.
◦ Emissions taxes are more expensive to administer.
◦ Emissions taxes do not specify how the pollution is to be controlled, which leads to economic inefficiency in the implementation of the pollution restraint.
Microeconomics ¦ Ragan ¦ 17th Edition
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Marked as best answer by booty5 on Oct 12, 2022

ElaneShive

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Reply #1 on: Oct 12, 2022
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booty5

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Reply 2 on: Oct 12, 2022
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