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3.2. Cost Savings from Existing Incentive Systems for Air Pollution Control

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Savings from Economic Incentives

Carlin (1992) and more recently Anderson and Lohof (1997) identify a number of incentive systems that involve air pollution: three fee-based programs (state air permit fees, federal nonattainment area fees, and chlorofluorocarbon taxes), an information reporting program (Title III of the Superfund Amendments and Reauthorization Act or SARA), several trading systems, and other systems. Here we will attempt to assess systematically the current or projected savings from each of these systems relative to command and control approaches. We first consider programs that affect stationary sources, then turn to mobile sources. Radiation programs currently do not utilize what could be classified as incentive mechanisms, though some have been suggested.

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