Go to this article: https://doi.org/10.1017/9781108377195.006 (the PDF is also posted on bCourses in the problem set folder).
Question:
Go to this article: https://doi.org/10.1017/9781108377195.006 (the PDF is also posted on bCourses in the problem set folder). Read section 6.2.1 "Leaded Gasoline Phase-Down." (Read the rest of the article if you are interested, it is great background!) This section describes a policy that was not explicitly a tradable permit system, but functioned as one. This policy was viewed as an early success story that built enthusiasm for market-based mechanisms.
1. According to the article, which type of firm represented the "low hanging fruit" (low abatement cost)? Fill in the bubble of your preferred answer. (1 point, no explanation required) # Small firms # Large firms
2. The policy worked by limiting the grams of lead per gallon (gplg). This is what we call a performance standard. Before trading was allowed, the regulator did not impose a uniform standard on all firms. In one or two sentences, explain why the performance standard that varied with firm size was thought to be more cost effective than a uniform standard. (2 points)
3. Despite this, the introduction of pollution trading increased the efficiency of the program. In one or two sentences, explain why, with reference to the regulator's information, the tradable system was more cost effective than the size-based performance standard. (2 points)
Taxation Of Individuals And Business Entities 2015
ISBN: 9780077862367
6th Edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver