Environmental Economics & Policy 6th Edition by Tom Tietenberg,Lynne Lewis

Exercise 2

When a threshold concentration is used as the basis for pollution control as it is for air pollution, one possibility for meeting the threshold at minimum cost is to spread the emissions out over time. One way to accomplish this is to establish a peak-hour pricing system in which the charges for emissions during peak periods are higher.
a. Would this represent a move toward efficiency or not? Why?
b. What effects should this policy have on mass-transit usage, gasoline sales, downtown shopping, and travel patterns?