Quasi-optimal price of undepletable externalities: comment
In reference to an article by W. Hamlen (Bell J. Economics, Spring, 1977) the author questions Hamlen's extending the Baumol-Oates result that an emission fee set to achieve a given level of an undepletable externality does so at minimum cost to society. Hamlen suggests a procedure for empirically deriving the value of this fee. This note points out that the relevance of Hamlen's work to policy is limited by the specification of his model. The author presents arguments to demonstrate that the fee Hamlen derives is sensitive to his model specification; that the formulation is unrealistic; and that the empirical evidence suggests the magnitude of the error is subsantial. While quasi-optimal emission fees are compatible with the Clean Air Act, they would be administratively difficult and legally indefensible for air pollution control. The fees would not be compatible with present water pollution legislation. 10 references.
- Research Organization:
- Colby Coll., Waterville, ME
- OSTI ID:
- 6947301
- Journal Information:
- Bell J. Econ.; (United States), Journal Name: Bell J. Econ.; (United States) Vol. 9:1; ISSN BJECD
- Country of Publication:
- United States
- Language:
- English
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54 ENVIRONMENTAL SCIENCES
CHARGES
CLEAN AIR ACT
ECONOMICS
ENVIRONMENTAL POLICY
GOVERNMENT POLICIES
IMPLEMENTATION
LAWS
LEGAL ASPECTS
POLLUTION CONTROL
POLLUTION LAWS
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