Question

In: Economics

intervention measures available to limit externalities by a country with example

intervention measures available to limit externalities by a country with example

Solutions

Expert Solution

Country and its government can take intervention measures to limit and control the externalities. For this, the government has to first identify the nature of externality, then intervention measures are taken by the government of the country. If there is a negative externality created by pollution, then to control it, the first intervention measure is to put the pollution tax. An example of one pollution tax is a motor fuels excise tax that is applied by the government in the USA. It is a pollution tax to control the negative externality created by the pollution. The second example of limiting the negative externality is to make interventions in the form of cap and trade programs. Under this program, the government issues pollution emitting allowances that are fixed for each firm. Now, any firm not using the allowance due to clean and green technology, can trade and sell their allowances to other firms. It helps earn money and promote clean an green technologies to be used by the firms. For example, many European countries have implemented cap and trade programs to control the pollution level and its arising externality.

If there is a positive externality, then it is the subsidy as a intervention measure by the government of the country to limit this type of positive externality. For example, the government gives scholarships and financial assistance to students as well as free lands, resources to university and colleges to offer higher education. Here, these benefits to students and universities and colleges work to get more students opt for the higher education and or a reduction in the tuition fees. It is a measure to limit the positive externality.


Related Solutions

Environmental pollution is a major threat for today's contemporary world. Explain the intervention measures available to...
Environmental pollution is a major threat for today's contemporary world. Explain the intervention measures available to limit externalities by a country. Mention at least one example for each measure.
Please write a contextual element, intervention , study of the intervention and measures for the topic...
Please write a contextual element, intervention , study of the intervention and measures for the topic Bedside Handoff.
Problem 1 There is no need for government intervention when positive externalities are present because no...
Problem 1 There is no need for government intervention when positive externalities are present because no one is being harmed”. Discuss the validity of this statement. Problem 2 Evaluate the following statement: The only amount of acceptable pollution is no pollution at all Problem 3 Following are marginal abatement costs of three firms, related to the quantity of emissions. Each firm is now emitting 10 tons/week, so total emissions are 30 tons/week. Suppose we wish to reduce total emissions by...
Under what conditions are externalities likely to be internalized without the necessity of government intervention?
Under what conditions are externalities likely to be internalized without the necessity of government intervention?
3. Do the existence of externalities (in either their positive or negative form) justify government intervention...
3. Do the existence of externalities (in either their positive or negative form) justify government intervention in the economy? Why or Why not?
What are externalities and give an example of each kind
What are externalities and give an example of each kind
Name and describe four forms of government intervention in markets. Provide one example of each intervention...
Name and describe four forms of government intervention in markets. Provide one example of each intervention in health insurance or health care markets.
Name and describe four forms of government intervention in markets. Provide one example of each intervention...
Name and describe four forms of government intervention in markets. Provide one example of each intervention in health insurance or health care markets.
Negative externalities are production costs that are borne by third parties. In the classic example, such...
Negative externalities are production costs that are borne by third parties. In the classic example, such externalities are the effects of pollution caused by steel mills, chemical plants, etc. Of the many proposed taxation policies designed to penalize producers responsible for creating negative externalities, perhaps the most contentious is the "carbon tax". What are the arguments for and against a carbon tax? How would the tax affect the competitiveness of the exports of countries imposing such a tax? What steps...
Is the Economy Self Adjusting in your country or Need Intervention from authorities ? WHY ?
Is the Economy Self Adjusting in your country or Need Intervention from authorities ? WHY ?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT