# The following table provides information on emissions, transfer coefficients and the marginal costs of emissions reduction for a mixed pollutant from three different sources. a) Complete the table below, adding

The following table provides information on emissions, transfer coefficients and the marginal costs of emissions reduction for a mixed pollutant from three different sources. a) Complete the table below, adding the missing information for concentration units reduced and the marginal cost of concentration reduction for each source. write down any formulae you use. b) Suppose the goal of the regulator is to reduce total concentrations at the receptor by 7.25 units. is the in order to achieve the total required reductions? Show how you arrive at your answer. c) is the total abatement cost of emission reduction for each source? is the economy-wide total abatement cost of achieving the target? d) is the optimal tax rate for each source in order to achieve the required reductions? Show how you arrive at your answer. e) Does your answer in part d) make sense? Explain why. f) How is your solution to this problem different from a typical solution in a uniformly mixed pollutant problem? g) Suppose that the regulator set a uniform tax of $3 per unit of emissions. How many emissions units would each source reduce under this policy? Would this policy achieve the target concentration reduction? Clearly show how you arrive at your answer. h) As an economist, which policy would you recommend: the non-uniform tax rate identified in part (d) or the uniform tax policy from part (g)? Justify your answer. Marginal

Marginal Cost

Emission

Cost of

Concentration

of

Units

Emissions

Units

Concentration

Reduced

Reduction

Reduced

Reduction

Source 1: transfer coefficient= 1

2

6

B

10

12

14

Source 2: transfer coefficient= .75

6

10

12

14

Source 3: transfer coefficient= .5

ON

12

14

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