Monday, November 28, 2005

EPA picking up the pace

In Environmental Economics, we have discussed many different types of policies that are all geared towards reducing pollution. No matter the specific type of policy, enforcement is always a big problem. This is due to the fact that each individual firm will abate only to a point in which the MPC (marginal penalty curve) is equal to the MAC (marginal abatement curve). To increase the compliance rate, the EPA can raise fines for violations, raise the probability of getting caught, or do a combination of the two.
The EPA published an article on Nov. 15 that shows that the agency has increased the probability that violators of environmental policies will be caught. In 2005, the EPA prosecuted some of the “largest environmental crimes in history.” The specific charges and sentences can be found through the link to the EPA website.
My question to the audience is this: will the increased prosecutions shift the MPC to the left, causing a higher compliance rate, or will they not act as a deterrent?

http://www.epa.gov/compliance/data/results/annual/fy2005.html

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