Emissions standards and ambient environmental quality standards with stochastic environmental services.

Hamilton, Stephen F. and Requate, Till (2012) Emissions standards and ambient environmental quality standards with stochastic environmental services. Journal of Environmental Economics and Management, 64 (3). pp. 377-389.

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Abstract

Many important environmental policies involve some combination of emission controls and ambient environmental quality standards, for instance SO2 emissions are capped under Title IV of the U.S. Clean Air Act Amendments while ambient SO2 concentrations are limited under National Ambient Air Quality Standards (NAAQS). This paper examines the relative performance of emissions standards and ambient standards when the natural environment provides stochastic environmental services for assimilating pollution. For receiving media characterized by greater dispersion in the distribution of environmental services, the optimal emissions policy becomes more stringent, whereas the optimal ambient policy generally becomes more lax. In terms of economic performance, emissions policies are superior to ambient policies for relatively non-toxic pollutants, whereas ambient standards welfare dominate emissions standards for sufficiently toxic pollutants. In the case of combined policies that jointly implement emissions standards and ambient standards, we show that the optimal level of each standard relaxes relative to its counterpart in a unilateral policy, allowing for greater emissions levels and higher pollution concentrations in the environmental medium. (C) 2012 Elsevier Inc. All rights reserved.

Document Type: Article
Research affiliation: Kiel University
OceanRep > The Future Ocean - Cluster of Excellence
Kiel University > Kiel Marine Science
Refereed: Yes
ISSN: 0095-0696
Projects: Future Ocean
Date Deposited: 14 May 2014 10:05
Last Modified: 14 May 2014 10:05
URI: http://oceanrep.geomar.de/id/eprint/24009

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