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m
CCALUr pro ble
COns mev om
of OPEC YegroAn h e myelU E CO m pan e

ENVIRONM ENTAL ECON 01/07/30a3

Applico hon of
Ecoonetrice in EnUirorme nla Eronom'se
mic
Oshrom Paper
Nal Dependant aer a ilabii hy Diheren e

Caliornia- waer Quolas

Moctue 11|> Maruet y Non Naruet Bauecd appsoach

Environ men kaj Issue.

Extermal i ot SUvVs
O EnvironmenBal Exter aliiey
Neg Exenalik wear 4 Tear on Roode

Satey Exkrnalih

robl ems oim Coogiap Soluion

OThe Amigmmeot frobe
Houtdout pro lble
() Free Rider Problem
Transac tion CosK Negotia hing Problems

ublic Sechor Remedie br Exer nalihe

) Price Poliey - Taxahion, Subsidy
2) uanhi y Regulaho
- Quola

ban
Standards
 PAGE NO.

DATE
12/01/ a0aa) MP Morn na) olamajt
cuonhi Begulahon
Fim oo
SHCE PM
tunop SNC PMC spenotmonet
Recl uchon on poltunon
r e d u c hio n

Fim's cos
MP SMB R Ophima
rox ie ks
be hekt

Haynal be neh't aceuYel by

CHax) Hige Teolueiry pollubon is
R Recuc hen sameconslank
Polluhlorn

Redurhon

Model wih He roqeno u ma vqinal cos

Taxa hon HD of polluhon is $1/unit of polluhon

Low cos to reduce the polluion

Firmn
High eest(H)

CHJ=S 2 CLC) O t22

MCH () 3 2 MCL(2): S2

redduchon done by each rm

2H Z h et polluh'on

In me absense ot an regulahon
torahon

L he don+ have any

L h ZL
2h Z o

enhve to redure
incenkive Jo Tedute
pottuo n

P-7-o
 Onconshrained PAGE NO.

DATE:

Objechve Nar 2H +-CH (24)-CL(LL)

Func ion

FOc
- MCH(LH) - o
H

av

-MCL(EL) =0o2
frem egu 0
from eu

THCHCZm) T=RHCH (UL)

1324

The socially ophmal euhome is mahe he htghcost

otat
m ho recute polluhon by 1/3Td ow cogb
Krm to gedue Folel polluhon by 3rd

Nor HeteAm i'ncenhvisto remunera n peop'C

or me ill eDMeks o policy chane tauen b

e Proper alue n w qhe

aren. due o me gov polcy, peopie ave
pei mu ner a Le o r me
o EmuAErhuy e

l eecl o pol ici

 Lep
Adophny nets
hechnotom4 heY man Po lbina T
each 1 deve tppme nb/
Fech nolop caadvanbnerel PAGE NO.

AAAhonalig clautr > Ec DATE:

CQuo La Uniorm qh regu

lahen)
weuld bom equal o 2 C 1/2

his i's not emctent becauue mH ha higher Me

Ine ChcienL

Non uni hov n

h egula N'on

Mauekabl e pemik

Distinc ion blw rice cinc duantity Approche in AdTesSin

Externalihe

Bosic Hode1 I
MC S N C R Opinal
Cost Benekk ealuhon7
e c C u ed
tothe Srie in a sense
ophmal pojluhng
e vel1
HD = SHB

R Reduchon
MC Tising
MO is Mat

Taiable
TY Regulahon Corechive Ta
Permik
Carbon baxel Ccbon CrediH
Not eict en
Devhce in coc unchor CCap Tvade)
Qre noH cont{deretu
 PAGE NO.
DATE

Ftkms
Multipleflankauit dilerent yeduchon cost

Cos u
Beneb
MLB
N

HC

SB

NOO

IMultiple hms wih dilerent reduchon cast

cost
enet ACBTO
roo
MCA-

MCT

So 300 Reduchon

O Perm >free chaves

Cosu
K) Unueytainiy ot Harginal
 1 t s vevy had o hrd ou the MC o
ne ims in me all
CUe
wduth
menb woulc tet
henne the govep
A dsy
uuiem Tot DATE auva,
m pe

Marttet Pov pottun'an eduthon wíh un erlain (osh

Cost4
one i s MCH,(
eO vu
, ( go
ire
v lk
) eshmeui)

P i Pla e r

HB i conng
doum u potutiun
1ax
eduLh'on i
intrecun
HD SHB
Sheepness of
MDmore
Beduchon anrertatn

ay B u t which nmemol
Soluhon by
S mosE ineieienl.
Sotuh'on b uanh

findhedtaelweight los
com pan

Deaduseight ogs due Dendweight Jors due

qyanh ToX

ND is harev, Tax is more prehe Yed

1 eurve
 PAGE NO.
Oeaduxight Jogs due DATE
due Yen TGHOpe

to tox Deod
weipht lors

Cost Cy
Bene h t

tox

MD SMB

Rel uchon

when, ND is sheeper, quanky Tegula hion is much more

pPreerred.
 PAGE NO
/DATE
ENVIRONMENTAL ECONOMICS
AMaNGHAAD re a1/04/90a2
Hou polic ins rumenh Poou ino Nau ral Resour re lanogfmn
Diveet Provision
)Delailed Regulah'on
N r o l 2 on
weskrn aha OraMZont

3)Flexibe Penuloah om
42 Tradabie (OuoLe o l h
) 1 a C A , Peez ov cha a

e) Cergeahon Prici'n/Peau tocd pvictng