Pareto Optimality and Pollution AbatementA Pedagogic Note

Pareto Optimality and Pollution AbatementA Pedagogic Note Environmental economics has typically adopted two approaches to the demonstration of the optimal level of pollution. The first superimposes a marginal pollution cost MPC function on the traditional model of the profit maximising firm and demonstrates that Pareto optimality requires the output price to be set equal to marginal social cost MSC, defined as the sum or marginal private cost MC and marginal pollution cost. The second looks at the marginal pollution cost and compares it to the marginal cost of pollution control MPCC. The optimum in this approach then exists when marginal pollution cost equals marginal cost of pollution control. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Social Economics Emerald Publishing

Pareto Optimality and Pollution AbatementA Pedagogic Note

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0306-8293
DOI
10.1108/eb013831
Publisher site
See Article on Publisher Site

Abstract

Environmental economics has typically adopted two approaches to the demonstration of the optimal level of pollution. The first superimposes a marginal pollution cost MPC function on the traditional model of the profit maximising firm and demonstrates that Pareto optimality requires the output price to be set equal to marginal social cost MSC, defined as the sum or marginal private cost MC and marginal pollution cost. The second looks at the marginal pollution cost and compares it to the marginal cost of pollution control MPCC. The optimum in this approach then exists when marginal pollution cost equals marginal cost of pollution control.

Journal

International Journal of Social EconomicsEmerald Publishing

Published: Mar 1, 1979

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