A Sketch of Environmental Microeconomics

Alfred Endres and Volker Radke
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Alfred Endres: University of Hagen
Volker Radke: State University Ravensburg

Chapter 7 in Economics for Environmental Studies, 2018, pp 105-137 from Springer

Abstract: Abstract The preceding section closed by stating a serious problem: market failure. It is at this point that a third «protagonist» is called upon the «stage» of economics to make amends, the government. To see how this might be done in principle, we introduce the concept of «internalizing externalities», an idea that the media love to quote but seem to not always fully understand. Then, we turn from the principle to its practical application. Pollution taxes and command and control are introduced as alternative environmental policy instruments, and are evaluated according to economic criteria. This chapter is supposed to show how microeconomic analysis, as discussed in the preceding chapter, is useful for the analysis of environmental problems and policy. In the main part of this chapter, we will follow the standard economic textbook procedure assuming production and abatement technology to be given. However, the chapter is completed by a discussion of environmentally friendly technical change.

Keywords: Pollution Tax; firmsFirm; Marginal Abatement Costs; Social Optimal Level; Marginal Abatement Cost Curve (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/978-3-662-54828-8_7

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