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2.1. Diverse Sources and Little-Known Control Technology

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Savings from Economic Incentives

Direct regulatory approaches generally are most effective when all the affected sources of pollution have similar emission characteristics, environmental impacts, and pollution control possibilities and when the regulators have as good a knowledge of the available abatement opportunities. These conditions do not apply to many of current environmental problems since the "easy" pollution sources have already been controlled. Many heterogeneous smaller sources discharge effluents into the nation's streams and rivers. Emissions from small dispersed area and mobile sources contribute over one-half of the precursors of ozone in most nonattainment areas. Millions of motorists change their oil and release used motor oil into the environment in a variety of places and ways. Shortages of capacity and the difficulty of siting new solid waste facilities in communities across the nation have stimulated interest in ways to reduce the generation of solid waste by households. Any program to orchestrate significant reductions of greenhouse gas emissions would require actions by billions of individuals throughout the world if it is to be successful. For these and similar environmental problems, direct regulatory action may be much more expensive and less effective than economic incentives.

Particularly for such diverse sources, individual firms or households are more likely than regulators or legislators to have the knowledge to choose the most effective pollution control techniques for their particular situation. Acting on their own knowledge or with information provided by vendors of equipment or government agencies, individuals and firms are most likely to be aware of the full range of options available from process changes to input changes to behavioral changes to specific control technologies, and their costs and effectiveness. Regulatory bodies are not likely to have access to this range of knowledge. Regulatory approaches further fail to provide an incentive to adopt pollution controls other than those specified by regulators, even if they would be more effective.

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