Question

According to the EPA’s prospective analysis of the 1990 to 2010 period, total social benefits (TSB) associated with the CAAA of 1990 are estimated at $690 billion ($1990) and the comparable total social cost (TSC) estimates are $180 billion ($1990). Explain why these data do not communicate whether the regulations outlined by the CAAA of 1990 are efficient.

Answer 1

US Federal Government strives very hard to stabilize the balance the Environmental Pollution threat existing in all spaces of the States. In order to reduce the effects of Environmental Pollution US Federal Board formed Environment Protection Agency (EPA) was formed in 1970. It was the Autonomous Agency which undergoes many Research and Development Projects to control the different source of pollution like Air, Water and Surface, etc. In order to control the Air pollution separate Legislation Act was formed as Clean Air Act Amendments (CAAA) in 1990.

Many Total Social Benefits (TSB) was accumulated during the period from 1990 to 2010 period. As said in the case study, its is emphasized about estimate of cost that the cost of TSB is $690 billion. But the Total Social Cost (TSC) incurred was about $180 billion. In the Monetary Terms, the TSB has the desirable effect. The Economic balance of Cost Index (CI) also estimated was about $510 billion. But the Administrative Failure factor ruined the benefits of the Economic balance of Cost Index of CAAA in the long-run.

As discussed above Administrative bottlenecks are indentifed with the communication gap of sharing ideas between All the Governing body of the States and the Federal Governing bodies regarding attainment of TSB in controlling the Air pollution with the help of EPA. As Many industries have the share of huge Tax paying adjustments in order to contribute the revenue in each State. The State regulation cannot interfere directly with the Ordinance passed by the Federal Govt together with the CAAA. So the State should coordinate with the CAAA and EPA with full cooperative Step to eradicate the air pollution caused by the Industries. So it is apprently prooved that regulations made by CAAA are not efficient. It should be properly monitored.