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Command and control • 27,000 major sources of pollutants in US are subject to control • Clean Air Act 1970; EPA created to oversee • Describe C & C framework • Is C & C framework efficient? Cost-effective?
C & C framework • Establish ambient air quality standards • Legal ceiling on outdoor air concentration • Set according to health “threshold” • Protect the most sensitive members of popn • States develop procedure / timetables for meeting standards • EPA can halt federal funds to states if goals not met
Efficiency of C & C policy? • Threshold concept • “margin of safety sufficiency high that no adverse effects would be suffered by any member of the population as long as the air quality is at least as good as that specified by the standards.” • But adverse health effects are occurring at pollution levels lower than the ambient standard
Efficient level of standard • Efficiency: set standard to max net benefit • Problem is measuring benefits (damages avoided from higher standards) • Efficient level hard to estimate with much confidence • EPA study of Clean Air Act estimated benefits btw. $5 and $50 trillion
Uniformity (space) • No account for number of people exposed • Sensitivity of local ecology • Costs of compliance in various areas • Efficiency would dictate different standards in different areas • Lots of inefficiencies in rural areas (low popn)
Timing of emission flows (time) • Concentrations are important • Standards based on averages • Constant levels of control • Efficiency would dictate: • Stringent control when meteorological conditions stagnant • Less so under normal conditions
Concentration vs. exposure • Present standards defined in terms of concentration • Health effects are related to human exposure to pollution • Determined by both concentration, space, and how much time spent in place • On average, only 10% time spent outdoors • Very little attention to indoor pollutants
Innovative approaches • Emissions trading • Initial allocation matters • Free vs. auction • EU experience • Windfall profits to big polluters • RGGE in NW 2008 • 10 NE states; emissions capped starting 2009 • Emission charges • Tax damage costs per unit • Double dividend