The diagram below shows the marginal cost of abatement for each of two firms, A and B. Each firm is initially abating Q0 units of pollution.
FIGURE 17-8
Refer to Figure 17-8. Suppose a system of tradable pollution permits is introduced into this market and the equilibrium permit price is p*. We can expect that
◦ Firm B will buy permits from Firm A, pollute less, and increase its costs by the areas 2 + 3; Firm A will sell permits to Firm B, pollute more, and reduce its earnings by areas 4 + 5.
◦ Firm B will sell permits to Firm A, pollute more, and reduce its costs by the area 1; Firm A will buy permits from Firm B, pollute less, and increase its earnings by area 4.
◦ Firm B will sell permits to Firm A, pollute less, and reduce its costs by the area 1; Firm A will buy permits from Firm B, pollute more, and increase its costs by the area 4.
◦ Firm B will buy permits from Firm A, pollute more, and reduce its costs by the area 1; Firm A will sell permits to Firm B, pollute less, and increase its earnings by area 5.
Sequential decline of whale catches in the Antarctic shows the strong effect of human predators.
Diagram of the interior of Uranus
Plant Diagram
Firms Incorporated into U.S. Steel
Typical Startup Cost Categories
Cost of Laptops