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5 Command and Control Approach

This document discusses different approaches to environmental regulation, including command-and-control, market-based, and voluntary approaches. It then focuses on different types of environmental standards such as ambient standards, emission standards, and technology standards. It discusses the economics of standards and how incentive-based approaches like charges, subsidies and tradable permit systems can help address the challenges of command-and-control standards.

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Febe Shannen Yoewono
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© Attribution Non-Commercial (BY-NC)
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Download as PPT, PDF, TXT or read online on Scribd
156 views

5 Command and Control Approach

This document discusses different approaches to environmental regulation, including command-and-control, market-based, and voluntary approaches. It then focuses on different types of environmental standards such as ambient standards, emission standards, and technology standards. It discusses the economics of standards and how incentive-based approaches like charges, subsidies and tradable permit systems can help address the challenges of command-and-control standards.

Uploaded by

Febe Shannen Yoewono
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Command and Control Approach

Program Studi Manajemen Fakultas Ekonomi Unika Soegijapranata

Wijanto Hadipuro

Approaches
Command and Control
*) lihat BakuMutu UU LH Ps 1 poin 13, 15; Ps 14; Ps 20 dan 21; Amdal dan UKL/UPL Ps 22 dst.; PAJAK dan SUBSIDI Ps 43 (3b)

Market-based Approach => lihat Perdagangan Karbon dan Green Consumers Kesadaran Produsen*) => lihat ISO 14000 Tekanan NGOs => lihat Green NGO
Instrumen Ekonomi Ps 1 poin 33; Ps 14; Ps 42 Audit Ling Ps 1 poin 28; Ps 14

Voluntary Agreement see NEPI 47/237

Pendekatan Ekonomi Lingkungan

Standards

Types of Standards
Ambient standards Emission standards Technology standards Combination

Seem simple and direct?

Ambient Standards
Ambient environmental quality refers to the qualitative dimensions of the surrounding environment => ambient quality of the water in a particular river An ambient standard is a never-exceed level for some pollutant in the ambient environment Problems?

Contoh
Standar kualitas udara di AS untuk SO2 (sulfur dioksida): maksimum rata-rata tahunan 80 g/m3 dan maksimum selama 24 jam dengan rata-rata 365 g/m3. Rata-rata, karena ada masalah musim dan daily variations dalam hal konsisi meteorologis serta emisi yang berubah-ubah. Rata-rata, artinya dalam jangka pendek kualitas udara bisa lebih buruk dari standar; asalkan saja tidak berlangsung terlalu lama agar dapat dinetralisir oleh periode saat kualitas di bawah standar.

Problem
We must know how the emissions of the various sources contribute to the changes in this measure

Emission Standards
Emission (or effluent) standards are never-exceed levels applied directly to the quantities of emissions coming from pollution sources => quantity of material per some unit of time (grams/minute) e.g. upper limit or average per period. Link to ambient standards?
role of nature, change of physical character of pollutant, and human decision

Emission Standards
Peran alam seperti siklus hidrologis: transport from point of discharge to other locations (dilluting and dispersing) + chemical processes => bisa berpengaruh pada ambient

Emission Standards
Bases: rate (ppm), concentration (BOD), total quantity of residuals, residuals per unit output or input, percentage removal of pollutant = performance standard Problems?

Problem
Emisi mobil ditetapkan standarnya tetapi sulit mengontrol berapa jumlah kendaraan yang digunakan di jalan dan berapa km kendaraan digunakan => sehingga dapat berakibat nuruk terhadap standar ambient

Technology Standards
Technologies, techniques or practices that potential polluters must adapt Including design or engineering standards Problems?

The Economics of Standards


Cost MCA a

10

15

20 emission

The Economics of Standards


Standards and incentives Short run: standards are all or nothing, either they are being met or they are not; the last few units of emission reduction may be much more costly than the damages reduced.

The Economics of Standards


Political-economic aspects of standards Enforcement

Incentive-based

Types of Incentivebased
Charges and Subsidies Transferable discharge permits

Marginal Concept (1)


Emission (ton/month) Marginal Abatement Cost Total Abatement Cost Total Tax Bill at $120/ton

Total Costs 1200 1095 1045 935 885 860 860 890

10 9 8 7 6 5 4 3

0 15 30 50 70 95 120 150

0 15 45 95 165 260 380 530

1200 1080 960 840 720 600 480 360

2
1 0

185
230 290

715
945 1235

240
120 0

955
1065 1235

Marginal Concept (2)


Marginal Cost of Abatement (MCA): Besarnya tambahan biaya yang harus dikeluarkan perusahaan untuk menurunkan polusi sebesar satu satuan Marginal Social Damage (MSD): Kenaikan kerusakan yang ditanggung masyarakat akibat polusi Marginal Private Damage (MPD): Kenaikan kerusakan yang ditanggung perusahaan akibat polusi

Hubungan antara MCA, MPD dan MSD


Rp.
60 40 MSD

E
P MCA Z C R

MPD

Polusi

Pajak dan Denda Lingkungan


Cost MSD A B C EBECT 100 100 100 E Cost 30 40 50 ----------------------------------------------EBT 70 60 50 Tax 10% 7 6 5 ----------------------------------------------EAT 63 54 45 Penalty 10 ----------------------------------------------Profit 53 54 45

A T* X Tax SDCost 0 P2 Ab Cost P* P1 MCA P

Abatement Subsidies
A public authority would pay a polluter a certain amount per ton of emissions for every ton it reduced, starting from some benchmark level => opportunity cost (when a polluter chooses to emit a unit of effluent, it is in effect forgoing the subsidy payment it could have had if it had chosen to withhold that unit of effluent instead)

Abatement Subsidies
Emission (ton/month) Marginal Abatement Cost Total Abatement Cost Total Subsidy at $120/ton Atau $ 240/ton

Total Subsidy minus TCA 0 105/225

10 9

0 15

0 15

0 120/240

8
7 6 5 4 3 2 1 0

30
50 70 95 120 150 185 230 290

45
95 165 260 380 530 715 945 1235

240/480
360/720 480/960 600/1200 720/1440 840/1680 960/1920 1080/2160 1200/2400

195/435
265/615 315/795 340/940 340/1060 310/1050 245/1205 135/1215 -35/1165

Deposit-Refund Systems
A subsidy (the refund) is paid to consumers when they return an item to a designated collection point Beverage containers or waste lubricating oil

Types of Environmentally Related Subsidies


Tax benefits Reduced environmental fines Public grants to encourage environmental programs Development rights purchase program Public support of environmental market development Cost-sharing grants Tax exemptions for pollution-control or recycling equipment Reduction in normal fines if firms undertake extensive pollutioncontrol plans Grants to farmers to adopt conservation practices Grants to business or communities to establish recycling program

Public purchases of agricultural development rights to maintain land in agriculture or open space Cash payment for people who turn in old high-emitting automobiles

Grants made to localities to cover a portion of the cost of building wastewater treatment facilities

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