【正文】 ernality: Pollution 169。 2020 Pearson AddisonWesley Negative Externality: Pollution The Coase Theorem The Coase theorem is a proposition that if property rights exist, only a small number of parties are involved, and transactions costs (defined below) are low, then private transactions are efficient. There are no externalities because all parties take into account the externalities involved. The oute is independent of who has the property rights. 169。 2020 Pearson AddisonWesley Negative Externality: Pollution The Coase solution works only if transactions costs are low. Transactions costs are the cost of conducting a transaction. An example is the transactions costs of buying a home include fees for a realtor, a mortgage loan advisor, and legal assistance. When a large number of people are involved in an externality and transactions costs are high, the Coase solution of establishing property rights doesn’t work and governments try to deal with the externality. 169。 2020 Pearson AddisonWesley Negative Externalities: Pollution Government Actions in a Market with External Costs There are three main methods that the government uses to cope with external costs: ? Taxes ? Emission charges ? Capandtrade 169。 2020 Pearson AddisonWesley Negative Externalities: Pollution Taxes The government can set a tax equal marginal external cost. The effect of such a tax is to make marginal private cost plus the tax equal to marginal social cost, MC + tax = MSC. This tax is called Pigovian tax, in honor of the British economist Arthur Cecil Pigou, who first proposed dealing with externalities in this fashion. 169。 2020 Pearson AddisonWesley Figure shows how a pollution tax equal to the marginal external cost can achieve an efficient oute. At the quantity of the good produced MSC = MSB. The government collect a tax revenue. Negative Externalities: Pollution 169。 2020 Pearson AddisonWesley Negative Externality: Pollution Emissions Charges The government sets a price per unit of pollution, so that the more a firm pollutes, the higher are its emissions charges. For the emissions charge to induce the firm to generate the efficient level of pollution, the government would need a lot of information that is usually unavailable. 169。 2020 Pearson AddisonWesley Negative Externality: Pollution CapandTrade Each firm is assigned a permitted amount of pollution per period and firms trade permits. The market price of a permit confronts polluters with the social marginal cost of their actions and leads to an efficient oute. This method was used successfully to decrease lead pollution in the United States. 169。 2020 Pearson AddisonWesley The Tragedy of the Commons The tragedy of the mons is the overuse of a mon resource that arises when its users have no incentive to conserve it and use it sustainably. Examples include the overfishing of Atlantic Ocean cod and South Pacific whales. The traditional example from which the term derives is the mon grazing land surrounding middleage British villages. 169。 2020 Pearson AddisonWesley The Tragedy of the Commons Sustainable Use of a Renewable Resource Renewable resource is one that replenishes itself by birth and growth of new members of the population. Sustainable catch is the quantity of fish that can be caught year after year without depleting the stock. If the stock is small, the quantity of new fish born is small, so the sustainable catch is small. If the stock is large, many fish are born but they must to plete for food…. so only a small number survive to reproduce and grow large enough for fishers to catch. 169。 2020 Pearson AddisonWesley The Tragedy of the Commons Figure illustrates the sustainable catch. As the stock of fish increases, the sustainable catch increases. Beyond that number, more fish pete for food and the sustainable catch falls. If the catch exceeds the sustainable catch, the fish stock diminishes. 169。 2020 Pearson AddisonWesley The Tragedy of the Commons The Overuse of a Common Resource Figure shows why overfishing occurs. The supply is the marginal private cost curve, MC. The demand is the marginal social benefit curve, MSB. Market equilibrium occurs at 800,000 tons per year and $10 a pound. 169。 2020 Pearson AddisonWesley The Tragedy of the Commons The marginal social cost curve is MSC. The efficient quantity is 300,000 tons per year. At the market equilibrium, there is overfishing and a deadweight loss arises. 169。 2020 Pearson AddisonWesley The Tragedy of the Commons Achieving an Efficient Oute It is harder to achieve an efficient use of a mon resource than to define the conditions under which it occurs. The three main methods used to achieve the efficient use of a mon resource are ? Property rights ? Production quotas ? Individual tran