Read the following responses which are based upon this discussion question ”
Discussion Question: Do Market-Oriented Environmental Tools Have an Impact on Firm Decisions?
Do some research to see what type of market-oriented environmental tools are currently being utilized for either federal, state, or local governments. Then, explain the tool being utilized and if it has had an impact on a firm’s behavior. ”
Reflect and substantively comment on each of the posts. Support your statements with evidence from the required studies, other research, and experiences. (3 sources for each response ) (2 responses total) (1 response each post)
Discussion Post 1 to respond to: (writers name: Jason Trucks)
“Market-oriented environmental tools are policies that create incentives for firms to reduce their pollution output. There are three main categories for these tools: pollution charge, marketable permit program and property rights. Every firm has a different situation, some firms may find the marginal cost of using one of the tools listed above more profitable than using another tool. For instance, here in Texas they have Tax Code Section 11.31 Pollution Control Property. This code states that if you can prove your facility has a method for the reduction or methods of control of air, water or land pollution then the firm may be entitled to a tax exemption. This is an example of the market-oriented environmental tool pollution charge which gives a profit-maximizing firm the motivation to reduce pollution emissions. The state of Texas also uses permit program, but it appears that program has been unsuccessful. An organization named Grist reported that companies in Texas have released some 1.1 billion pounds of air, water or land pollution OVER their permit limits since 2002 that is the equivalent of companies going over their permits by fifty-five million pounds a year. With that being the case, I believe Texas needs to work on their market oriented environmental tools to give companies the incentives to do better in the environmental area.
“13.4: Market-Oriented Environmental Tools.” Business LibreTexts, 1 July 2020, biz.libretexts.org/Courses/Lumen_Learning/Book%3A_Microeconomics_(Lumen)/13%3A_Module_11-_Public_Goods_and_Externalities/13.04%3A_Market-Oriented_Environmental_Tools. Accessed 17 June 2024.
Grist, Naveena Sadasivam, Clayton Aldern, Jessie Blaeser and Chad Small. “A Billion-Pound Problem: How Unchecked “Excess Emissions” Ballooned in Texas.” The Texas Tribune, 7 June 2023, www.texastribune.org/2023/06/07/texas-pollution-excess-emissions-tceq/.
Legislature, Tex. “Tex. Tax Code § 11.31 – Pollution Control Prop.” Texas.public.law, texas.public.law/statutes/tex._tax_code_section_11.31. Accessed 17 June 2024.
“Tax Relief for Pollution Control Property.” Texas Commission on Environmental Quality, www.tceq.texas.gov/airquality/taxrelief.
“What Are Market-Oriented Environmental Tools? (Article).” Khan Academy, www.khanacademy.org/economics-finance-domain/microeconomics/market-failure-and-the-role-of-government/environmental-regulation/a/market-oriented-environmental-tools-cnx.”
Discussion post 2: (writers name: Kamonte Westbrook)
“Market-oriented environmental tools have a significant impact on firm’s decisions. The three main tools of market-oriented policies are pollution charges, marketable permits, and better-defined property rights (“Khan”, n.d.). The advantage of these tools are they can achieve any desired reduction at a lower cost of society compared to command-and-control regulation. First, a pollution charge is a tax imposed on the quantity of pollution that a firm emits; also known as pollution tax (“Lrnr”, n.d.). The purpose of this charge is to give a profit-maximizing firm an incentive to figure out ways to reduce emissions. A number of environmental policies are actually pollution charges. For example, the government and many state governments impose taxes on gasoline (Lynham, n.d.). Next, are marketable permits which is a program in which a city or state government issues permits allowing only a certain quantity of pollution (“Khan”, n.d.). The purpose marketable permits serve are to basically allow flexibility in pollution reduction efforts for firms. Lastly, the better-defined property rights which is defined as the legal rights of ownership on which others are not allowed to infringe without paying compensation (Lynham, n.d.). The policy of this tool is to serve as an effective environmental protection tool. All-in-all, these tools work together to achieve the same goal of desired reduction of pollution which therefore contributes to overall environmental quality.
References:
Lynham, J., & OpenStax. (n.d.). 12.3 market-oriented environmental tools. Principles of Microeconomics Hawaii Edition. https://pressbooks.oer.hawaii.edu/principlesofmicroeconomics/chapter/12-3-market-oriented-environmental-tools/
Unknown. (n.d.). Lrnr. https://web.lrnr.us/
Unknown. (n.d.-b). What are market-oriented environmental tools? (article). Khan Academy. https://www.khanacademy.org/economics-finance-domain/microeconomics/market-failure-and-the-role-of-government/environmental-regulation/a/market-oriented-environmental-tools-cnx”
