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    Economics and environmental regulations

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    How economic analysis can be used to determine the most effective and economical regulations or policies to help solve the environmental concern?

    © BrainMass Inc. brainmass.com October 10, 2019, 1:05 am ad1c9bdddf

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    The primary tool for assessing the effectiveness of a policy, economically speaking, is called marginal analysis. This basically tells us whether the next unit of gain that can be obtained through environmental regulations is worth the cost of the regulation. For example, if there is a law that requires cars to achieve a certain level of fuel efficiency, there is a cost involved. This includes the higher cost of producing the cars, which is passed on to consumers. Consumers buy fewer new cars, which can result in a loss of jobs. Clearly there is a point where increasing fuel efficiency any ...

    Solution Summary

    The solution discusses how economics can help with determining effective environmental regulation.