4006449
Description
Mind Map by tringuyenngocmin, updated more than 1 year ago
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Created by tringuyenngocmin
about 9 years ago
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Negative externality of
production by Harry,
Edward and Rain
- Remedies
- Supply
- Market-based solution
- Imposing taxes (ie IBM laptops
releasing pollutants into the air)
- PROS
- Reducing the
amount of well fare loss, increasing revenue for government to use it in public goods
- Reducing the
amount of well fare loss, increasing revenue for government to use it in public goods
- CONS
- Difficult to measure the pollution
created accurately and to put a value
on it
- Difficult to identify which firms are
polluting and to what extent each firm
is responsible for the pollution.
- Taxes do not stop the actual
pollution
- Difficult to measure the pollution
created accurately and to put a value
on it
- PROS
- Tradeable pollution permits
(Cap and Trade system)
- Licences to pollute a specific amount
that the government allocates to
polluting firms that are tradable in the
open market.
- PROS
- The limit of pollution is set
- Incentive to create more
green and efficient firms
- Loss of output is smaller than if the government
splits the total level of pollution up into same
amount for all firms.
- The limit of pollution is set
- CONS
- not reduce pollution
- difficulty in determining
the initial allocation
of permits
- not reduce pollution
- PROS
- Licences to pollute a specific amount
that the government allocates to
polluting firms that are tradable in the
open market.
- Imposing taxes (ie IBM laptops
releasing pollutants into the air)
- Command-and-control solutions
- Ban or restrict output of
the poducts
- Cons
- Unemployment
- Non-consumption of valuable products
- Unemployment
- Pros
- Reduce pollution
- Reduce pollution
- Cons
- Ban or restrict output of
the poducts
- Market-based solution
- Demand
- Advertising, or moral
suasion, education
- Advertising, or moral
suasion, education
- Supply
- Market failure
- Problems?
- Lower price, more quantity
- Over-consumption
and over-supply
- Inefficient allocation of
resources
- Inefficient allocation of
resources
- Over-consumption
and over-supply
- Lower price, more quantity
- Effect?
- Threats to Sustainability
- Welfare Loss
- Threats to Sustainability
- Problems?
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