Environmental & Natural Resource Economics 10th Edition by Thomas Tietenberg,Lynne Lewis

Exercise 1

Efficiency analysis suggests that the regulation of hazardous pollutants should take exposure into account-the more persons exposed to a given pollutant concentration, the larger is the damage caused by it and therefore the smaller is the efficient concentration level, ail other things being equal. An alternative point of view would simply ensure that concentrations be held below a uniform threshold, regardless of the number of people exposed. From this latter point of view, the public policy goal is to expose any and ail people to the same concentration level-exposure is not used to establish different concentrations for different settings. What are the advantages and disadvantages of each approach? Which do you think represents the best approach? Why?