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LEARNING OBJECTIVES
- Explain why command-and-control approaches to reducing pollution are inefficient.
- Explain what is meant by incentive approaches to pollution reduction and discuss examples of them, explaining their advantages and disadvantages.
Suppose that the goal of public policy is to reduce the level of emissions. Three types of policy alternatives could be applied. The first is persuasion—people can be exhorted to reduce their emissions. The second relies on direct controls, and the third uses incentives to induce reductions in emissions.
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