Economic Repercussions of the Clean Air Act - Essay Example

In the public discussion over legal obligations versus economic rewards, there is a very limited knowledge of the fundamental economics concerned. If the goal is to regulate the discharge to an accurate, predictable level, direct quantitative regulations are apt to be most successful in attaining the social objective. If they can be checked and implemented, direct regulations will be effective in lessening pollution to a predictable level. It is far from evident that legislators must aspire for a definite pollution level.

Being aware or predicting the right pollution level demands costs and benefits information that could be indecisive at best. Devoid of this particular knowledge legislators might prefer a technique that reduces the social costs stemming from the inaccurate costs or benefits information. This is likely to entail economic rewards instead of obligatory standards. While there are various views regarding the suitable objective of environmental policy, this paper supposes that environmental legislators pursue to take full advantage of the economic interests emerging from their policy decisions.

The problem is that they are trying to exploit an indecisive ‘net benefit stream’, which is identified as the “difference between the health, aesthetic and material benefits of reducing air pollution and the costs of achieving this reduction” (Crandall, 1983, 59). There are critical setbacks of indecisiveness in approximating the costs of benefits of regulation. The importance of future health effects, the link between ambient quality of air and discharges from point-sources, the significance of reduced mortality or morbidity rates, and the regulation costs across various sources are the primary providers of this indecisiveness (Freedman & Jaggi, 1993).

For each of these important connections, subjective or objective approximations should be performed by