Question

Use a diagram to discuss whether you agree or disagree with the following statement.“When there are two firms which can control emissions at different marginal abatement costs, a uniform emission standard is a cost-effective way to achieve the emission reduction target.”

Answer 1

Marginal abatement cost are the cost incurred by firms when they are required to reduce environmental negatives such as pollution during their production processl
Marginal abatement cost curve is downward sloping.(when we move from right to left) Because as abatement cost increases,emission will decrease
No. I disagree with the statement.When there are two firms which can control emissions at different marginal abatement costs, a uniform emission standard is a not cost effective way to achieve the emission reduction target. Uniform emission standard will be cost effective only if all the polluters have the same marginal abatement cost.
Because marginal damage produced by each firms are different. Some firm produces more damages and others creates less damages. Under this situation,a uniform emission standard is not an effective way. Because uniform emission standard will not reduce emission targets. So it won't reduce environment pollution An uniform emission standard can not be efficient in different regions . If marginal damages in urban areas exceed the marginal damages in rural areas, or vice versa , uniform emission standard will not be socially efficient. If marginal damages in both rural and urban areas are same ,then the uniform emission standard will be socially efficient.