{"id":6553,"date":"2018-02-05T15:37:45","date_gmt":"2018-02-05T15:37:45","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/chapter\/reading-command-and-control-regulation\/"},"modified":"2024-04-25T23:03:07","modified_gmt":"2024-04-25T23:03:07","slug":"command-and-control-regulation","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/chapter\/command-and-control-regulation\/","title":{"raw":"Command-and-Control Regulation","rendered":"Command-and-Control Regulation"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Objectives<\/h3>\r\n<ul class=\"list\">\r\n \t<li class=\"item\">Explain and give examples of command-and-control regulation<\/li>\r\n<\/ul>\r\n<\/div>\r\nWhen the United States started passing comprehensive environmental laws in the late 1960s and early 1970s, a typical law specified how much pollution could be emitted out of a smokestack or a drainpipe and imposed penalties if that limit was exceeded. Other laws required the installation of certain equipment\u2014for example, on automobile tailpipes or on smokestacks\u2014to reduce pollution. These types of laws, which specify allowable quantities of pollution and which also may detail which pollution-control technologies must be used, fall under the category of <strong>effluent standards<\/strong>. In effect, effluent standards require that firms increase their costs by installing anti-pollution equipment; firms are thus required to take the social costs of pollution into account.\r\n\r\nCommand-and-control regulations, such as effluent standards,\u00a0have been highly successful in protecting and cleaning up the U.S. environment. In 1970, the Environmental Protection Agency (EPA) was created to oversee all environmental laws. In the same year, the <em>Clean Air Act<\/em> was enacted to address air pollution. Just two years later, in 1972, Congress passed and the president signed the far-reaching <em>Clean Water Act<\/em>. These command-and-control environmental laws, and their amendments and updates, have been largely responsible for America's cleaner air and water in recent decades. However, economists have pointed out three difficulties with command-and-control environmental regulation.\r\n\r\nFirst, command-and-control regulation offers no incentive to improve the quality of the environment beyond the standard set by a particular law. Once the command-and-control regulation has been satisfied, polluters have zero incentive to do better.\r\n\r\nSecond, command-and-control regulation is inflexible. It usually requires the same standard for all polluters, and often the same pollution-control technology as well. This means that command-and-control regulation draws no distinctions between firms that would find it easy and inexpensive to meet the pollution standard\u2014or to reduce pollution even further\u2014and firms that might find it difficult and costly to meet the standard. Firms have no reason to rethink their production methods in fundamental ways that might reduce pollution even more and at lower cost.\r\n\r\nThird, command-and-control regulations are written by legislators and the EPA, and so they are subject to compromises in the political process. Existing firms often argue (and lobby) that stricter environmental standards should not apply to them, only to new firms that wish to start production. Consequently, real-world environmental laws are full of fine print, loopholes, and exceptions.\r\n\r\nAlthough critics accept the goal of reducing pollution, they question whether command-and-control regulation is the best way to design policy tools for accomplishing that goal.\r\n<div class=\"textbox examples\">\r\n<h3>Watch It<\/h3>\r\nThis video explains command and control regulations and takes a deeper look at when and why these types of policies are effective.\r\n\r\n<iframe src=\"https:\/\/www.youtube.com\/embed\/gRolVmFOk1U?start=30&amp;end=482&amp;autoplay=0\" width=\"800\" height=\"470\" frameborder=\"0\"><span style=\"width: 0px; overflow: hidden; line-height: 0;\" class=\"mce_SELRES_start\">\ufeff<\/span><\/iframe>\r\n\r\n<\/div>\r\n<div class=\"textbox tryit\">\r\n<h3>Try It<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/a7c39ea2-ca29-441f-a087-a9d110bcff9f\r\n\r\n<\/div>\r\n<div class=\"textbox tryit\">\r\n<h3>Try It<\/h3>\r\nThese questions allow you to get as much practice as you need, as you can click the link at the top of the first question (\u201cTry another version of these questions\u201d) to get a new set of questions. Practice until you feel comfortable doing the questions.\r\n\r\n[ohm_question]155212[\/ohm_question]\r\n\r\n<\/div>\r\n<div class=\"textbox learning-objectives\">\r\n<h3>Glossary<\/h3>\r\n[glossary-page][glossary-term]effluent standard: [\/glossary-term]\r\n[glossary-definition]environmental regulation that limits pollution to a certain maximum quantity[\/glossary-definition][\/glossary-page]\r\n\r\n<\/div>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Objectives<\/h3>\n<ul class=\"list\">\n<li class=\"item\">Explain and give examples of command-and-control regulation<\/li>\n<\/ul>\n<\/div>\n<p>When the United States started passing comprehensive environmental laws in the late 1960s and early 1970s, a typical law specified how much pollution could be emitted out of a smokestack or a drainpipe and imposed penalties if that limit was exceeded. Other laws required the installation of certain equipment\u2014for example, on automobile tailpipes or on smokestacks\u2014to reduce pollution. These types of laws, which specify allowable quantities of pollution and which also may detail which pollution-control technologies must be used, fall under the category of <strong>effluent standards<\/strong>. In effect, effluent standards require that firms increase their costs by installing anti-pollution equipment; firms are thus required to take the social costs of pollution into account.<\/p>\n<p>Command-and-control regulations, such as effluent standards,\u00a0have been highly successful in protecting and cleaning up the U.S. environment. In 1970, the Environmental Protection Agency (EPA) was created to oversee all environmental laws. In the same year, the <em>Clean Air Act<\/em> was enacted to address air pollution. Just two years later, in 1972, Congress passed and the president signed the far-reaching <em>Clean Water Act<\/em>. These command-and-control environmental laws, and their amendments and updates, have been largely responsible for America&#8217;s cleaner air and water in recent decades. However, economists have pointed out three difficulties with command-and-control environmental regulation.<\/p>\n<p>First, command-and-control regulation offers no incentive to improve the quality of the environment beyond the standard set by a particular law. Once the command-and-control regulation has been satisfied, polluters have zero incentive to do better.<\/p>\n<p>Second, command-and-control regulation is inflexible. It usually requires the same standard for all polluters, and often the same pollution-control technology as well. This means that command-and-control regulation draws no distinctions between firms that would find it easy and inexpensive to meet the pollution standard\u2014or to reduce pollution even further\u2014and firms that might find it difficult and costly to meet the standard. Firms have no reason to rethink their production methods in fundamental ways that might reduce pollution even more and at lower cost.<\/p>\n<p>Third, command-and-control regulations are written by legislators and the EPA, and so they are subject to compromises in the political process. Existing firms often argue (and lobby) that stricter environmental standards should not apply to them, only to new firms that wish to start production. Consequently, real-world environmental laws are full of fine print, loopholes, and exceptions.<\/p>\n<p>Although critics accept the goal of reducing pollution, they question whether command-and-control regulation is the best way to design policy tools for accomplishing that goal.<\/p>\n<div class=\"textbox examples\">\n<h3>Watch It<\/h3>\n<p>This video explains command and control regulations and takes a deeper look at when and why these types of policies are effective.<\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/gRolVmFOk1U?start=30&amp;end=482&amp;autoplay=0\" width=\"800\" height=\"470\" frameborder=\"0\"><span style=\"width: 0px; overflow: hidden; line-height: 0;\" class=\"mce_SELRES_start\">\ufeff<\/span><\/iframe><\/p>\n<\/div>\n<div class=\"textbox tryit\">\n<h3>Try It<\/h3>\n<p>\t<iframe id=\"assessment_practice_a7c39ea2-ca29-441f-a087-a9d110bcff9f\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/a7c39ea2-ca29-441f-a087-a9d110bcff9f?iframe_resize_id=assessment_practice_id_a7c39ea2-ca29-441f-a087-a9d110bcff9f\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe><\/p>\n<\/div>\n<div class=\"textbox tryit\">\n<h3>Try It<\/h3>\n<p>These questions allow you to get as much practice as you need, as you can click the link at the top of the first question (\u201cTry another version of these questions\u201d) to get a new set of questions. Practice until you feel comfortable doing the questions.<\/p>\n<p><iframe loading=\"lazy\" id=\"ohm155212\" class=\"resizable\" src=\"https:\/\/ohm.lumenlearning.com\/multiembedq.php?id=155212&theme=oea&iframe_resize_id=ohm155212&show_question_numbers\" width=\"100%\" height=\"150\"><\/iframe><\/p>\n<\/div>\n<div class=\"textbox learning-objectives\">\n<h3>Glossary<\/h3>\n<div class=\"titlepage\">\n<dl>\n<dt>effluent standard: <\/dt>\n<dd>environmental regulation that limits pollution to a certain maximum quantity<\/dd>\n<\/dl>\n<\/div>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-6553\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Command-and-Control Regulation. <strong>Authored by<\/strong>: OpenStax College. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/cnx.org\/contents\/XAl2LLVA@7.33:3j4O_OFz@3\/Command-and-Control-Regulation\">https:\/\/cnx.org\/contents\/XAl2LLVA@7.33:3j4O_OFz@3\/Command-and-Control-Regulation<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em>. <strong>License Terms<\/strong>: Download for free at http:\/\/cnx.org\/contents\/bc498e1f-efe9-43a0-8dea-d3569ad09a82@4.4<\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">All rights reserved content<\/div><ul class=\"citation-list\"><li>Command and Control Solutions. <strong>Provided by<\/strong>: Marginal Revolution University. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.youtube.com\/watch?time_continue=14&#038;v=gRolVmFOk1U\">https:\/\/www.youtube.com\/watch?time_continue=14&#038;v=gRolVmFOk1U<\/a>. <strong>License<\/strong>: <em>Other<\/em>. <strong>License Terms<\/strong>: Standard YouTube License<\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":29,"menu_order":10,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Command-and-Control Regulation\",\"author\":\"OpenStax College\",\"organization\":\"\",\"url\":\"https:\/\/cnx.org\/contents\/XAl2LLVA@7.33:3j4O_OFz@3\/Command-and-Control-Regulation\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"Download for free at http:\/\/cnx.org\/contents\/bc498e1f-efe9-43a0-8dea-d3569ad09a82@4.4\"},{\"type\":\"copyrighted_video\",\"description\":\"Command and Control Solutions\",\"author\":\"\",\"organization\":\"Marginal Revolution University\",\"url\":\"https:\/\/www.youtube.com\/watch?time_continue=14&v=gRolVmFOk1U\",\"project\":\"\",\"license\":\"other\",\"license_terms\":\"Standard YouTube License\"}]","CANDELA_OUTCOMES_GUID":"68bfea8b-40c4-4911-940f-c5f09ec7407b, f6d70757-c715-4511-bc49-1290f4e57c8d","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-6553","chapter","type-chapter","status-publish","hentry"],"part":6533,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/wp-json\/pressbooks\/v2\/chapters\/6553","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/wp-json\/wp\/v2\/users\/29"}],"version-history":[{"count":19,"href":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/wp-json\/pressbooks\/v2\/chapters\/6553\/revisions"}],"predecessor-version":[{"id":10233,"href":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/wp-json\/pressbooks\/v2\/chapters\/6553\/revisions\/10233"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/wp-json\/pressbooks\/v2\/parts\/6533"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/wp-json\/pressbooks\/v2\/chapters\/6553\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/wp-json\/wp\/v2\/media?parent=6553"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/wp-json\/pressbooks\/v2\/chapter-type?post=6553"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/wp-json\/wp\/v2\/contributor?post=6553"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-microeconomics\/wp-json\/wp\/v2\/license?post=6553"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}