The command-and-control approach to pollution reduction

Question

Quizplus · Accepted Answer

The command-and-control approach involves strict regulations and mandates, such as setting emission standards for factories or requiring specific pollution control technologies. This approach may not be as efficient as using market-based options such as emissions trading, where companies can trade pollution permits, because it does not give companies flexibility to find the most cost-effective solutions to reduce pollution. In fact, the command-and-control approach may increase private marginal costs and result in higher market prices, as companies have to invest in pollution control technologies or face penalties for non-compliance.

The Command-And-Control Approach to Pollution Reduction