10-16 0 Dollars Standards and Fees per unit of Emissions MSC Cost is less than the fee if emissions were Fee not reduced. 3 Total Fee Total MCA of AbatementE* Abatement Cost 12 Level of Emissions Economics ECONOMICS MANAGEMENT SCHOOL,TONGJI UNIVERSITY
Economics ECONOMICS & MANAGEMENT SCHOOL, TONGJI UNIVERSITY 10-16 Total Abatement Cost Cost is less than the fee if emissions were not reduced. Total Fee of Abatement Standards and Fees Level of Emissions Dollars per unit of Emissions MSC MCA 3 12 E* Fee
190 10-17 Ways of Correcting Market Failure Transferable Emissions Permits Permits help develop a competitive market for externalities. Agency determines the level of emissions and number of permits Permits are marketable High cost firm will purchase permits from low cost firms Economics ECONOMICS MANAGEMENT SCHOOL,TONGJI UNIVERSITY
Economics ECONOMICS & MANAGEMENT SCHOOL, TONGJI UNIVERSITY 10-17 • Transferable Emissions Permits – Permits help develop a competitive market for externalities. • Agency determines the level of emissions and number of permits • Permits are marketable • High cost firm will purchase permits from low cost firms Ways of Correcting Market Failure