Question
Many air pollutants, including NO X , are produced by electric power plants and manufacturing plants that burn fossil fuels. To reduce total NO X
Many air pollutants, including NOX, are produced by electric power plants and manufacturing plants that burn fossil fuels. To reduce total NOX emissions in a region the regulatory agency decides to use a tax on emissions. Engineers tell them it is less expensive to reduce NOX from electric plants than from other manufacturing facilities. Because of this cost difference, the regulators propose to set a low tax rate for NOX emissions from all power plants and a high tax rate for NOX emissions from all manufacturing plants. As an economist, what is good or bad about this plan? Include a graph in your answer.
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