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1 what two policies could you use to reduce the total amount of emissions

Information disclosure as regulation. EPA has also pursued a number of non-regulatory approaches that rely on voluntary initiatives to achieve improvements in emissions controls and management of environmental hazards. These programs are usually not intended as substitutes for formal regulation but instead act as important complements to existing regulation. Others have been developed to improve environmental quality in areas that policymakers expect may be regulated in the future but are currently not regulated, such as greenhouse gas emissions and non-point source water pollution.

Types of economic incentive and hybrid-based approaches Marketable Permit Systems or Trading Programs There are two types of trading programs currently used in the United States: ERCs are uncapped trading systems, meaning there is no set limit on the maximum allowable level of pollution within a regulated area.

Economic Incentives

Instead, pollution limits are rate-based, meaning polluters cannot exceed a rate of emissions e. Polluters earn credits by reducing emissions below their specified rate.

  • Others have been developed to improve environmental quality in areas that policymakers expect may be regulated in the future but are currently not regulated, such as greenhouse gas emissions and non-point source water pollution;
  • An example is the U;
  • An outline of the Climate Change Act requires the Government to execute methods that will reduce the production of both carbon dioxide and greenhouse gases;
  • This will be in effect until July 2019, when the scheme will be replaced by an increase in the Climate Change Levy , a business tax with the main rates applying to those in the industrial, commercial, agricultural and public service sectors;
  • This is also the case in the production of chemicals, the emissions from transportation of produce and the clearing of forests to grow crops;
  • The Carbon Plan In December 2011 the Government developed the Carbon Plan with proposals for achieving reductions and meeting the 2050 target.

A capped allowance system or cap-and-trade system sets a maximum allowable cap on total emissions. The cap is equal to the total number of allowances or permits allocated to a group of polluters.

  • Climate Change Act 2008 The Climate Change Act 2008 was introduced to legally assure the reduction of carbon emissions;
  • These two laws not only give polluters an incentive to make more careful and socially conscious decisions, but also hold them financially responsible to the victims of pollution;
  • Climate Change Act 2008 The Climate Change Act 2008 was introduced to legally assure the reduction of carbon emissions;
  • Examples include pollution taxes, water user fees, wastewater discharge fees, and solid waste disposal fees;
  • In an attempt to mitigate this, the Government is encouraging the modern innovation of green technologies such as making buses greener and reinforcing the use of public transport.

These allowances are distributed among the individual polluters and the number of allowances held by each firm sets the limit on the amount of pollution they have the right to emit.

Allowances can be doled out through grandfathering, where polluters receive free allowances based on their historic emissions levels i. Once allocated, firms must either reduce their emissions directly, or they can purchase allowances from other firms who have reduced below their required level.

An example is the U. Acid Rain Program, a cap-and-trade system that cost-effectively reduced sulfur dioxide emissions from electric utilities. Other examples include voluntary carbon trading schemes, such as the Chicago Climate Exchange; and nutrients trading programs between water polluting firms and agricultural producers that aim to reduce excessive loading of fertilizer and pesticides into water bodies.

Economic Topics

Top of Page Emissions Taxes, Fees, and Charges Fees, charges, and taxes are widely used incentives which generally place a per unit monetary charge or fee or tax on pollution emissions or waste to reduce the overall quantity. The main drawback is that fees, charges and taxes cannot guarantee a specific amount of pollution reduction, only that those who pollute will be penalized. Examples include pollution taxes, water user fees, wastewater discharge fees, and solid waste disposal fees.

  • Examples include pollution taxes, water user fees, wastewater discharge fees, and solid waste disposal fees;
  • While subsidies offer incentives to reduce emissions similar to a tax, they also encourage market entry to qualify for the subsidy;
  • Second, high abatement cost polluters can defray costs by paying the emissions fee instead of cleaning up;
  • Rather than charging a polluter for emissions, a subsidy rewards a polluter for reducing emissions.

Top of Page Subsidies for Pollution Control Subsidies are forms of financial government support for activities believed to be environmentally friendly. Rather than charging a polluter for emissions, a subsidy rewards a polluter for reducing emissions. Examples of subsidies include grants, low-interest loans, favorable tax treatment, and procurement mandates. Subsidies have been used for a wide variety of purposes, including: While subsidies offer incentives to reduce emissions similar to a tax, they 1 what two policies could you use to reduce the total amount of emissions encourage market entry to qualify for the subsidy.

Top of Page Tax-Subsidy Combinations e. Deposit-Refund Systems Deposit-refund systems are a prominent example of a Tax-Subsidy incentive approach. Take, for example, a beverage container recycling program. First, a product charge or tax is initiated that increases the upfront cost of purchasing the container. Second, a subsidy is rewarded to the consumer for recycling or properly disposing of the container.

Deposit-refund systems are also available for lead-acid batteries, automobile parts, pesticide containers, propane gas containers, large paper drums, and beer keys. Hybrid Approaches Combining Standards and Pricing Approaches Pollution standards set specific emissions limits, and thereby reduce the chance of excessively high damages to health or the environment but may impose large costs on polluters.

Emissions taxes restrict costs by allowing polluting sources to pay a tax on the amount they emit, but because there are no emission limits, taxes leave open the possibility that pollution may be excessively high.

A combination of standards and pricing mechanisms, referred to as a "safety-valve", may be used to limit both costs and pollution in these cases. This combination imposes the same emissions standard on all polluters and all polluters are then subject to a unit tax for emissions in excess of the standard. This policy combination has some attractive features. First, if the standard is set properly, proper protection of health and the environment will be assured since the standard provides protection against excessively damaging pollution levels.

Second, high abatement cost polluters can defray costs by paying the emissions fee instead of cleaning up. Top of Page Liability Rules Liability assignment is most often targeted at producers of waste or emissions that are easily identifiable and hazardous to public health. The purpose of liability is to not only hold polluters accountable for the proper management and disposal of their waste or emissions, but also for cleanup and remediation costs.

There are two major U. These two laws not only give polluters an incentive to make more careful and socially conscious decisions, but also hold them financially responsible to the victims of pollution.

Top of Page Information Disclosure Information disclosure programs are designed to influence firm behavior through the dissemination of information on items such as production processes, labor standards, and pollution levels, to the federal, state and local government agencies, or to the public. By making business owners, employees, shareholders and customers a part of the regulatory process, all parties have an incentive to practice behavior that is socially responsible.

Both voluntary and mandatory reporting programs exist in the United States. An EIS is a report specifying potential environmental damages and alternative approaches to the agency action to minimize adverse impacts. Labeling schemes are widely used voluntary reporting programs.

Government strategies to decrease the production of carbon emissions

Generally, a non-profit organization or government agency sets standards for a product to meet environmentally sustainable goals. Top of Page Voluntary actions Voluntary programs are useful for policy-makers who wish to test potential policy options or who want to encourage better production or consumption practices. Goals of voluntary actions include providing participating firms with a competitive edge firms that participate in a voluntary program might have larger social appeal than those that do notincrease-value added to businesses, and reduce pollution.

Most voluntary programs are designed and implemented by the U.

There are several benefits available to companies who wish to join a voluntary program. First, participation can improve their public image. Second, the program might offer technical or other types of assistance in exchange for participation. Third, because voluntary programs are sometimes initiated as a pilot test to a regulation, participation can help the company to more quickly transition to a formal law, and possible limit potential litigation and monitoring and enforcement costs.

A general problem with voluntary action programs is that it is quantitatively difficult to assess the success of the program. Program evaluators have developed several statistical methods, however, to research success rates.

Top of Page Key Considerations The selection of the most appropriate market-based incentive or hybrid regulatory approach depends on a wide variety of factors, including: