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Tradable Emissions Permits & Emissions Control

 

It is the corporate environmental officers that can enact the greatest reduction in emissions at the lowest cost because they are the ones that are familiar with both the equipment and procedures involved.
             Standards, or regulations, are probably the most traditional and least flexible of the major policy tools. They prescribe a maximum limit on levels of specific pollution emissions over a given period of time. The greatest benefit of a standard is that it represents a direct measure against pollution by forcing emitters to absorb the costs of reduction. However, this forcing of responsibility does not distribute costs in any efficient way and can easily generate an unfair advantage for those firms in a position of lower cost reduction. Another problem with standards is that it relies greatly on industry participants for acquiring information regarding the extent of emission and the price of reducing. If the costs of reduction are too high it may cause a lesser standard to be enacted. "Knowledge that a standard may be relaxed can create an incentive for the regulated to create the impression that costs are or will be high" in an attempt to dissuade or at least minimize the impact of control legislation. The US Clean Air Act (1990) is a prime example of a definitive government regulation. Through it's original articles and subsequent amendments, the Act has greatly increased the enforcement and penalty provisions related to potential non-compliance. These provisions include penalties for both knowing and negligent endangerment, whereas in the past penalties had been largely limited to the former. It also placed a great deal of enforcement power into the hands of the field inspectors, allowing them to apply in-field citations of up to $5000/day on offending firms. The Act established a "bounty hunter" provision as well, with rewards of up to $10,000 for tips resulting in successful prosecution.


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