外部性与公共物品.ppt
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1、,Chapter 18,Externalities and Public Goods,Chapter 18,Slide 2,Topics to be Discussed,Externalities Ways of Correcting Market Failure Externalities and Property Rights Common Property Resources,Chapter 18,Slide 3,Topics to be Discussed,Public Goods Private Preferences for Public Goods,Chapter 18,Slid
2、e 4,Externalities,Negative Action by one party imposes a cost on another party Positive Action by one party benefits another party,Chapter 18,Slide 5,External Cost,Scenario Steel plant dumping waste in a river The entire steel market effluent can be reduced by lowering output (fixed proportions prod
3、uction function),Chapter 18,Slide 6,External Cost,Scenario Marginal External Cost (MEC) is the cost imposed on fishermen downstream for each level of production. Marginal Social Cost (MSC) is MC plus MEC.,External Costs,Firm output,Price,Industry output,Price,Chapter 18,Slide 8,External Cost,Negativ
4、e Externalities encourage inefficient firms to remain in the industry and create excessive production in the long run.,Chapter 18,Slide 9,Externalities,Positive Externalities and Inefficiency Externalities can also result in too little production, as can be shown in an example of home repair and lan
5、dscaping.,Chapter 18,Slide 10,External Benefits,Repair Level,Value,Is research and development discouraged by positive externalities?,Chapter 18,Slide 11,Ways of Correcting Market Failure,Assumption: The market failure is pollution Fixed-proportion production technology Must reduce output to reduce
6、emissions Use an output tax to reduce output Input substitution possible by altering technology,Chapter 18,Slide 12,The Efficient Level of Emissions,Level of Emissions,2,4,6,Dollars per unit of Emissions,0,2,4,6,8,10,12,14,16,18,20,22,24,26,Assume: 1) Competitive market 2) Output and emissions decis
7、ions are independent 3) Profit maximizing output chosen,Why is this more efficient than zero emissions?,Chapter 18,Slide 13,Ways of Correcting Market Failure,Options for Reducing Emissions to E* Emission Standard Set a legal limit on emissions at E* (12) Enforced by monetary and criminal penalties I
8、ncreases the cost of production and the threshold price to enter the industry,Chapter 18,Slide 14,Standards and Fees,Level of Emissions,Dollars per unit of Emissions,Chapter 18,Slide 15,Options for Reducing Emissions to E* Emissions Fee Charge levied on each unit of emission,Ways of Correcting Marke
9、t Failure,Chapter 18,Slide 16,Standards and Fees,Level of Emissions,Dollars per unit of Emissions,Chapter 18,Slide 17,Standards Versus Fees Assumptions Policymakers have asymmetric information Administrative costs require the same fee or standard for all firms,Ways of Correcting Market Failure,Chapt
10、er 18,Slide 18,The Case for Fees,Level of Emissions,2,4,6,Fee per Unit of Emissions,0,1,2,3,4,5,6,7,8,9,10,11,12,13,1,3,5,14,The cost minimizing solution would be an abatement of 6 for firm 1 and 8 for firm 2 and MCA1= MCA2 = $3.,Chapter 18,Slide 19,Advantages of Fees When equal standards must be us
11、ed, fees achieve the same emission abatement at lower cost. Fees create an incentive to install equipment that would reduce emissions further.,Ways of Correcting Market Failure,Chapter 18,Slide 20,The Case for Standards,Level of Emissions,Fee per Unit of Emissions,0,2,4,6,8,10,12,14,16,2,4,6,8,10,12
12、,14,16,Chapter 18,Slide 21,Summary: Fees vs. Standards Standards are preferred when MSC is steep and MCA is flat. Standards (incomplete information) yield more certainty on emission levels and less certainty on the cost of abatement.,Ways of Correcting Market Failure,Chapter 18,Slide 22,Summary: Fee
13、s vs. Standards Fees have certainty on cost and uncertainty on emissions. Preferred policy depends on the nature of uncertainty and the slopes of the cost curves.,Ways of Correcting Market Failure,Chapter 18,Slide 23,Transferable Emissions Permits Permits help develop a competitive market for extern
14、alities. Agency determines the level of emissions and number of permits Permits are marketable High cost firm will purchase permits from low cost firms,Ways of Correcting Market Failure,Chapter 18,Slide 24,Question What factors could limit the efficiency of this approach?,Ways of Correcting Market F
15、ailure,Chapter 18,Slide 25,The Costs and Benefits of Reduced Sulfur Dioxide Emissions,Cost of Reducing Emissions Conversion to natural gas from coal and oil Emission control equipment,Chapter 18,Slide 26,Benefits of Reducing Emissions Health Reduction in corrosion Aesthetic,The Costs and Benefits of
16、 Reduced Sulfur Dioxide Emissions,Chapter 18,Slide 27,Sulfur Dioxide Emissions Reductions,Sulfur dioxide concentration (ppm),20,40,60,0,Dollars per unit of reduction,0.02,0.04,0.06,0.08,Observations MAC = MSC .0275 .0275 is slightly below actual emission level Economic efficiency improved,Chapter 18
17、,Slide 28,Emissions Trading and Clean Air,Bubbles Firm can adjust pollution controls for individual sources of pollutants as long as a total pollutant limit is not exceeded. Offsets New emissions must be offset by reducing existing emissions 2000 offsets since 1979,Chapter 18,Slide 29,Cost of achiev
18、ing an 85% reduction in hydrocarbon emissions for DuPont Three Options 85% reduction at each source plant (total cost = $105.7 million) 85% reduction at each plant with internal trading (total cost = $42.6 million) 85% reduction at all plants with internal and external trading (total cost = $14.6 mi
19、llion),Emissions Trading and Clean Air,Chapter 18,Slide 30,1990 Clean Air Act Since 1990, the cost of the permits has fallen from an expected $300 to below $100. Causes of the drop in permit prices More efficient abatement techniques Price of low sulfur coal has fallen,Emissions Trading and Clean Ai
20、r,Chapter 18,Slide 31,Recycling Households can dispose of glass and other garbage at very low cost. The low cost of disposal creates a divergence between the private and the social cost of disposal.,Ways of Correcting Market Failure,Chapter 18,Slide 32,The Efficient Amount of Recycling,Scrap,Cost,0,
21、4,8,12,Chapter 18,Slide 33,Refundable Deposits,Amount of Glass,$,Price falls to P and the amount of recycled glass increases to M*.,Chapter 18,Slide 34,Externalities and Property Rights,Property Rights Legal rules describing what people or firms may do with their property For example If residents do
22、wnstream owned the river (clean water) they control upstream emissions.,Chapter 18,Slide 35,Bargaining and Economic Efficiency Economic efficiency can be achieved without government intervention when the externality affects relatively few parties and when property rights are well specified.,External
23、ities and Property Rights,Chapter 18,Slide 36,Profits Under Alternative Emissions Choices (Daily),No filter, not treatment plant 500 100 600 Filter, no treatment plant 300 500 800 No filter, treatment plant 500 200 700 Filter, treatment plant 300 300 600,Factorys Fishermens Total Profit Profit Profi
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