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The clean air act 
Group 8:
 Laila, Dawt, Jack, Eshan
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Transcript

The clean air act

Group 8: Laila, Dawt, Jack, Eshan

Introduction

  • Introduction: The Clean Air Act and Its Impact
  • 1970s air pollution crisis: Breathing outside posed health risks
  • Air pollution levels 2-5 times higher than today's standards (EPA, 2021)
  • Clean Air Act implemented in 1970
  • decrease in air pollution, economy tripled in size (EPA, 2011)
  • Improved air quality, but costs for producers like car manufacturers
  • Analyzing policy's economic impact using supply/demand, elasticity, and surplus

Air pollution decreased by

73%

since then (EPA, 2011).

Supply and Demand Dynamics

  • Taxes & fines ↑ production costs (EPA, 2021)
  • Higher costs → lower supply
  • Higher prices → lower demand
  • New car prices ↑, sales ↓ (Stoll, 2021)
  • Taxes incentivize cleaner cars but hurt producers
  • Taxes revenue can be spent on alternatives, such as public-transport.

The Role of Elasticity

  • Elastic demand due to availability of substitutes and non-essential nature of cars
  • Inelastic supply creates challenges for car manufacturers
  • Producers may absorb more tax burden

Surplus (CS/PS/TS)

  • Consumer surplus ↓ as prices ↑
  • Producer surplus declines through lower demand, higher costs
  • Total Surplus:
  • Positive impact on total surplus if policy effectively reduces pollution
  • Benefits (cleaner air, improved health, and environmental preservation) can offset costs

Type of Good

  • The Clean Air Act as a public good
  • Non-rival and non-excludable nature
  • Benefits to the environment, health, and economy

Recommendations

  • Monitor and adjust compliance costs
  • Encourage investments in cleaner technologies and alternative fuel vehicles
  • Evaluate policy’s impact on consumer and producer surpluses
  • Educate public on benefits
  • Refine policy to sustain progress

Conclusion

  • The Clean Air Act shows the complexity of regulating externalities like pollution.
  • With careful balance of environmental and economic goals, it can continue improving social welfare.

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