However, command-and-control mechanisms have several drawbacks. Benefits and Drawbacks Benefits of Command-and-Control: These groups begin to perceive economic policy-instruments as imposing higher costs than command-and-control regulations.
As regulators seek to meet increasingly costly environmental quality goals, they have begun to look at incentives as a more flexible, lower cost alternative.
It is expected that the regulatory system can be made more effective by promoting environmentally efficient choices with less government interference. Command-and-control is comforting to politicians and people: Finally, these are just a rules.
Without quick responses and strict consequences non-compliance they are unlikely to succeed.
Even if traditional methods lead to an efficient solution, they might draw accusations of unfairness from the polluting firms. Often times it is hard or impossible for the government to know the cost structures of each of the polluting firms.
Polluters also have very little choice about how to meet the standards; therefore, there is no incentive to research new and creative ways to reduce their emissions. It is believed by many that the primary advantage of using command-and-control mechanisms is that they provide a clear outcome, while being comparatively simple to monitor compliance.
High administrative and information costs can afflict the government, while high compliance costs for the firms create more economic inefficiecncy As a result of these failures many economists and policy-makers are pushing for other regulatory tools like taxes, subsidies, and tradeable pollution permits.
Marketable permits allow companies to pollute at a level that is marginally cost-effective. It allows them to buy additional permits as needed if they fail to meet their targets internally, and to sell excess permits if they exceed their internal pollution reduction targets.
It is very costly for regulators to gather necessary information, and they often have to collect it from the sources that they are regulating — creating the possibility for inaccurate or dishonest reporting.
Public Finance and Public Policy. However, while command-and-control regulation is still common, more and more legislation is beginning to use market mechanisms, or a combination of the two, in order to best meet the demands of many environmental issues. This would drastically reduce flexibility of choice for the firms-see next point.
Updated by Dawn Anderson. In order to be efficient in most markets, the regulators must split the responsibility for reducing pollution unequally among the polluting firms.
This knowledge is required if the regulation is to be efficient. With technology constantly evolving it is very difficult for the regulatory agency to stay current with the most effective methods. There are three types of command-and-control mechanisms that regulators can choose to implement: This is not to say that traditional methods of combating pollution are worthless.
Incentives have several advantages, including allowing the source to play a role in determining the most cost-effective way to reduce their emissions and, thereby, in meeting their marginal costs.
There will be an incentive for firms to find loopholes if the regulatory agency or the regulation itself is weak. Indeed, many of these newer methods incorporate some type of the older style of regulation. Taxes or fees charge the polluter a certain amount per unit of pollution, the value of which is determined by the regulator.
The ones required to reduce pollution the most might cry foul over being treated differently. Finally, regulators can choose to implement a technology-based standard which would force polluters to use a particular pollution control technology that they deem reasonably cost-effective, such as installing scrubbers on smokestacks.
Therefore, the regulator does not need to know how cost-effective various control options will be, or what the cost is at any particular installation, because the source will be held accountable for all of their actions and will pay both pollution control costs and damage costs.Command & Control vs.
Market-based Solutions • Commands –Agencies draft regulations dictating behavior –Sanctions & punishments for failure to obey regulations Command & Control Policies • Market-based, incentive programs were.
Economic Incentives versus Command and Control because they provide a continual incentive to reduce emissions, thus promoting new technology, and permit maximum ﬂexibility in emissions reductions.
Rationale: The effects of CAC on technology are poten-tially complex. On the one hand, costly regulations provide a spur to ﬁnd less. Incentiv e-Based Policies for Environmental Management in Developing Countries Robert C. Anderson That so-called “command and control” approach creasingly are being asked to consider and implement incentive-based regulations for managing.
Command and Control Regulations versus Incentive Based Regulations When it comes to reducing pollution, there is no “one size fits all” approach. For several years, policymakers have looked to command and control regulations to enforce comprehensive environmental laws regarding pollution.
Typically, command and control regulations set forth uniform requirements regarding how much %(4). The command and control approach differs from the incentive-based regulatory approach, which works toward preventing environmental problems by providing inducements to encourage polluting entities.
APES Ch 2 Environmental History and Laws. CH 2 Raven Berg Environment 5e. STUDY. PLAY. Command and control regulations.
pollution by charging the polluter for each given unit of emissions; that is, by establishing a tax on pollution. Incentive-based regulation.Download