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23 Cards in this Set
- Front
- Back
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Reading: Green Groups See Tool in Economics
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-environmentalists realize their policies must be cost effective
-we must monetize he environment to take into account opportunity costs |
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Reading: How Economists See the Environment
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-do not believe the market solves all problems
-market prices do not always properly value scare amenities or resources |
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Reading: Tragedy of the Commons
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-having children is a open access resource problem
-external cost onto others -analogy to relinquishing the right to rob |
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Reading: Deterring Oil Spills
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-optimal penalties for environment and crime
-probability of being caught and cost in case that you are caught |
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Reading: SO2 Trading System
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-health impacts as large benefits
-benefits to low sulfur content were already happening -switch of support away from republicans -government ultimately killed the market |
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Reading: EU CO2 Trading System
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-centralized demand and decentralized supply
-cap within a cap -linking is cost effective -price harmonization as alternative to linking these markets |
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Policy Analysis: Asymmetric Information
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-QI have incentive to overstate
-PI has incentive to understate -like usual, tax and TDP have the private incentive of a sideways trapezoid |
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Policy Analysis: Innovation
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-standard has less incentives to innovate
-standard has tradeoff between static and dynamic equilibrium -extra cost savings for tdp and tax under active is a similar sideways trapezoid |
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Policy Analysis: Changing Economic Conditions
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-tdp manages to keep on target and to stay cost effective with an adjustment in its permit costs
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Policy Analysis: Uncertainty and DWSL
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-QI and PI create different DWSL
-QI DWSL is greater the flatter MD is |
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Criteria for Policy Analysis
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-ability to hit target
-cost effectiveness -incentives for innovation -asymmetric information -costs under uncertainty |
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Uniformly vs Non Uniformly Mixed Pollutants
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-uniformly cares about total emissions
-non uniformly cares about location of emission sources |
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Public Goods
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-non rivalrous
-non excludable (free rider problem) -vertically sum WTP |
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Why use Negligence?
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-court disputes over what should be payed
-financial risk is too high -accidents happen |
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Problems w/ Liability
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-Providing evidence
-Bankruptcy accounting -Transaction costs |
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Problems w/ Property Rights
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-Certain things are hard to assign PR too (ocean)
-Certain things will not be accounted for (birds) -Transaction costs |
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Hybrid Policy
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-worse off if you lie by the always familiar sideways trapezoid
-due to higher permit price due to under supply or higher permit price due to high subsidy |
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Studies of Non Cumulative Emissions
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-Source category taxes with 9 tax rates
-TDP without accumulation of hot spots |
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Assignment Lesson: Shipping Hull
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-Separation of E(TSC) and E(TPC)
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Assignment Lesson: Typical MAC and MD Model
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-you may have to have many kinks in the curve for more than 2 types of firms
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Assignment Lesson: MSB and MSC Model
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-tax looks different in this model and you must remember that the models are different
-one model plots output and the other plots emissions -shift MPC up to the optimal QUANTITY |
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Assignment Lesson: Market Power in TDP
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-If monopoly withholds permits then you cannot use the market price as it has been eliminated
-you must use the demand by the other firms and the supply is the sum of their permits and the permits that the monopoly is willing to offer |
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Assignment Lesson: Overall
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-be careful with rounding and rushing through algebra and calculations
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