A Big Mistake in the Pollution Theory: Abuse of Marginal Cost Pricing
7 Pages Posted: 1 Jun 2015
Date Written: June 1, 2015
Abstract
This paper shows that environmental economists have misinterpreted and abused the marginal cost pricing theory. The charge corresponding to the marginal cost of abating pollution does not work. On the contrary, it leads to more severe pollution. This paper proves that the cleaning firms should be paid commensurate with the marginal cost. But then, this paper advises caution to use this measure.
Keywords: Pollution, Prevention
JEL Classification: Q53
Suggested Citation: Suggested Citation
Choi, Hak, A Big Mistake in the Pollution Theory: Abuse of Marginal Cost Pricing (June 1, 2015). Available at SSRN: https://ssrn.com/abstract=2612807 or http://dx.doi.org/10.2139/ssrn.2612807
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