Question

11. Classify the following pollution-control policies as command-and-control or market incentive based:

a. A state emissions tax on the quantity of carbon emitted by each firm.
b. The federal government requires domestic auto companies to improve car emissions by 2020.
c. The EPA sets national standards for water quality.
d. A city sells permits to firms that allow them to emit a specified quantity of pollution.
e. The federal government pays fishermen to preserve salmon.

Answer 1

a.
A state emissions tax on the quantity of carbon emitted by each firm -market-oriented environmental tool
b.
A federal requirement that domestic auto companies improve car emissions by 2020-command-and-control regulation
c.
The EPA setting national standards for water quality- command-and-control regulation
d.
A city selling permits to firms that allow them to emit a specified quantity of pollution - a market-oriented environmental tool
e
The federal government paying fishermen to preserve salmon- market-oriented environmental tool