Dollars per Unit of Emissions MSC Standard Fee MCA 12 26 Standards and Fees
Dollars per Unit of Emissions Standards and Fees
The efficient level of emissions at E*can be achieved through either an emissions fee or an emissions standard.Facing a fee of $3 per unit of emissions,a firm reduces emissions to the point at which the fee is equal to the marginal benefit. The same level of emissions reduction can be achieved with a standard that limits emissions to 12 units
The efficient level of emissions at E* can be achieved through either an emissions fee or an emissions standard. Facing a fee of $3 per unit of emissions, a firm reduces emissions to the point at which the fee is equal to the marginal benefit. The same level of emissions reduction can be achieved with a standard that limits emissions to 12 units
Unit of Emissions MCA2 MCA1 6 5 4 3.75 3 2.50 Firm 1's Increased 2 Firm 2's Reduced Abatement Costs Abatement 1 Costs 2345678910111213 14 The case for Fees
The case for Fees
With limited information,a policymaker may be faced with the choice of either a single emissions fee or a single emissions standard for all firms
With limited information, a policymaker may be faced with the choice of either a single emissions fee or a single emissions standard for all firms
The fee of s3 achieves a total emissions level of 14 units more cheaply than a 7-unit-Per-firm emissions standard. With the fee,the firm with a lower abatement cost curve (Firm 2)reduces emissions more than the firm with a higher cost curve (Firm 1)
The fee of $3 achieves a total emissions level of 14 units more cheaply than a 7-unit-Per-firm emissions standard. With the fee, the firm with a lower abatement cost curve (Firm 2) reduces emissions more than the firm with a higher cost curve (Firm 1)