group8
Maha Hama
Created on November 29, 2023
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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.