Abatement Cost

Abatement Cost

The expense a business incurs as a result of cleaning or removing an undesired byproduct of its goods and services. Abatement cost is often associated with large manufacturing plants that must abide by environmental standards or city noise ordinances. However, it may apply to a small business also. For example, a dental office must bear the cost of disposing of medically hazardous material.
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It may be noted that the two shaded areas are equal, so that the notional revenue from the effective tax is dedicated wholly to abatement cost (including rents accruing to the owners of intra-marginal abatement opportunities)(11).
An economic instrument only provides a cost saving, for a given total pollution level, if marginal abatement cost functions differ.
Even without reduction purchases motivating the efficient level of pollution, the minimum abatement cost feature of the rights approach still should make it a very attractive means for controlling the problem.
KARACHI -- Pakistan wants to reduce 20 percent of its 2030 projected Green House Gas (GHG) emissions, amounting to 1603 million ton of carbon dioxide equivalent subject to the availability of international grants to meet the total abatement cost for the indicated 20 percent reduction amounting to about US$ 40 billion at current prices.
The bill also would provide $3 million for a lead abatement fund that would pay 75 percent of abatement cost, and the full cost, if the property owner can demonstrate the need.
A sound understanding of the level and heterogeneity of marginal carbon abatement cost (MAC) across localities, sectors or even firms would inform policy makers about the potential cost advantage of a market based approach over the traditional command and control approach (Newell and Stavins, 2003).
In the first stage, the regulator sets the NPSs' respective cost-share rates, [[beta].sub.1], and [[beta].sub.2], 0 [less than or equal to] [[beta].sub.j] [less than or equal to] 1, j = 1, 2, that is, the proportions of total abatement cost borne by the NPSs themselves.
The decreasing curve shows the marginal abatement cost (MAC) for emitter A, i.e.
(8.) The Swedish premium is equivalent to a carbon abatement cost of 43 [euro] per tonne of carbon dioxide, if the electricity is produced from gas.
The Pigouvian tax links directly to the pollution source, internalizes the negative externality at the optimal level (where the marginal benefit of pollution reduction equals marginal abatement cost), and does not discourage the production of economic output or related economic decisions [Baumol and Oates, 1988].
If marginal damages are increasing per unit of pollution (i.e., marginal benefits of abatement are decreasing), a decrease in marginal abatement cost decreases the optimal tax.
Overcompliance substantially changes the marginal abatement cost estimation problem.