Question

Marginal costs of abatement may different across firms due to

a.different aged technology across firms

b.different raw material used in the production process

c.different outputs being produced

d.all of the above

Technology standards provide an incentive for entrepreneurs in the area of pollution control to develop new ideas.

a.True

b.False

Emissions standards provide no incentive to innovate in terms of pollution control technology.

a.True

b.False

Output based standards provide incentive to innovate by reducing

a.emissions per unit of input

b.inputs used per unit of output

c.overall level of output

d.both of the first two answers

Technology forcing

a.increases the incentive for polluters to influence politicians to delay the onset of regulations

b.is designed to motivate the pollution control industry to invent new ways to meet environmental standards

c.is the idea of setting standards that are unrealistic given current levels of technology

d.all of the above

Answer 1

1) Here, option (d) is the correct answer

All the given reasons would contribute to the differences in the Marginal Cost of Abatement across different firms

                                    Marginal Cost of Abatement is referred to as the cost of reducing one more unit of pollution. With the differences in the technology used by various firms, the cost of pollution reduction would vary as most of the old technology devices would require more cost for reduction processes. With the differences in the raw materials used, some of the raw materials ay be more pollution causing and some other may be having lesser effect and hence the cost of pollution reduction would be different in accordance with the raw materials used in the production process. The output process also would bring in differences in the pollution effects and hence the reduction cost would be different for different output processes.

2) The given statement is true

Technology standards would give the entrepreneur an incentive in the area of pollution control to implement innovative ideas. Once various innovative technology standards are implemented, it would mean that the cost of production and pollution control are reduced to a good extend which would mean that the reduced cost could be made use of in implementing various innovative ideas which would bring various benefits to the firms.

3) The given statement is false

Emission standards are referred to as the various legal requirements and standards that are being set on the emission of a production firm. Once emission standards are being set, the firms would have to find ways to reduce the cost of implementing the standards and hence it would provide an incentive for innovations in pollution control technology

4) Here, option (a) is the correct answer.

Output based standards would provide incentive to innovate by reducing the emissions per unit of input. This means that the standards would be set on the output of the firm which is dependent on the emissions of the firm

5) Here option (d) is the correct answer. All the given statements are related to technology forcing

Technology forcing refers to a strategy where the regulator would set a specific standard or an objective which could not be realised with the existing technology. Since the requirement could not be met with the existing technology, the firms would either adopt to find ways to invent new technologies so that the objective could be met or would look to delay the objective by influencing the politicians. Hence, all the statements are true in this regard.