Economic Approaches to Air Pollution Control

Pollution-control approaches traditionally use economically inefficient bureaucratic regulation to make up for the lack of market-place control even though this approach creates weak research and development incentives and no incentives to reduce emissions below the maximum allowed level. A shift to market incentives to find an economics-based approach could employ subsidies, penalties, taxes, emission charges, or create marketable pollution rights. Complicating any approach chosen is transboundary air pollution because it would require a multinational decision-making body. The US is likely to move in the direction of one or more economic approaches as the Reagan administration dismantles regulatory agencies and states implement individual programs. The most successful of the approaches may prove appropriate for European countries to adopt. 32 references, 1 table. (DCK)