A Big Mistake in the Pollution Theory: Abuse of Marginal Cost Pricing

7 Pages Posted: 1 Jun 2015

See all articles by Hak Choi

Hak Choi

Chienkuo Technology University - Department of International Business; Chung-Hua Institution for Economic Research

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

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

Hak Choi (Contact Author)

Chienkuo Technology University - Department of International Business ( email )

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Changhua City, 500
Taiwan
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Chung-Hua Institution for Economic Research ( email )

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Taipei
Taiwan

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