Using Marginal Damages in Environmental Policy

A Study of Air Pollution in the United States

Robert O. Mendelsohn and Nicholas Z. Muller

This technical volume makes the case that air pollution policy in the United States can be improved through consideration of both the marginal abatement costs facing regulated sources, and the marginal damages associated with their emissions. The preferred approach is a fully efficient regulatory scheme. Recognizing that completely reforming today's regulatory program, which consists of a mix of command-and-control policies and cap-and-trade programs, is not likely to be easy in the short run, the authors propose a prioritization scheme for regulatory reform. This scheme ranks sources according to the net marginal damage of additional emissions. Policymakers should focus reforms on those sources and pollutants with the largest differences between marginal damages and marginal costs; this will yield the greatest return on incremental investments in abatement.

AEI Press

Pages: 164 • Trim: 6 x 9

978-0-8447-7218-9 • Hardback • January 2013 • $80.00 • (£62.00)

978-0-8447-7220-2 • eBook • January 2013 • $76.00 • (£58.00)

Subjects: Business & Economics / Environmental Economics, Business & Economics / Public Relations, Business & Economics / Research & Development

Using Marginal Damages in Environmental Policy

A Study of Air Pollution in the United States

Hardback

eBook

Summary

This technical volume makes the case that air pollution policy in the United States can be improved through consideration of both the marginal abatement costs facing regulated sources, and the marginal damages associated with their emissions. The preferred approach is a fully efficient regulatory scheme. Recognizing that completely reforming today's regulatory program, which consists of a mix of command-and-control policies and cap-and-trade programs, is not likely to be easy in the short run, the authors propose a prioritization scheme for regulatory reform. This scheme ranks sources according to the net marginal damage of additional emissions. Policymakers should focus reforms on those sources and pollutants with the largest differences between marginal damages and marginal costs; this will yield the greatest return on incremental investments in abatement.

Details

AEI Press

Pages: 164 • Trim: 6 x 9

978-0-8447-7218-9 • Hardback • January 2013 • $80.00 • (£62.00)

978-0-8447-7220-2 • eBook • January 2013 • $76.00 • (£58.00)

Subjects: Business & Economics / Environmental Economics, Business & Economics / Public Relations, Business & Economics / Research & Development

Author

Robert O. Mendelsohn is Edwin Weyerhaeuser Davis Professor of Forest Policy and a professor of economics at the School of Management at Yale University. Nicholas Muller is an assisant professor of economics and environmental studies at Middlebury College.

Using Marginal Damages in Environmental Policy

A Study of Air Pollution in the United States

Robert O. Mendelsohn and Nicholas Z. Muller

Using Marginal Damages in Environmental Policy

A Study of Air Pollution in the United States

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