This blog entry is about the USA Today article “Rule means coal plants must limit pollutants.” It discusses the new limits President Obama is putting on carbon pollution that coal using power plants can release into our atmosphere. It also discusses some of the effects this could have on the coal industry.
Carbon emissions from coal are said to be a large part in the global warming scare. If there is too much in the environment it can also be bad for humans. Because the action of burning coal affects others in a negative way it is said to have negative externalities. Normally these externalities can be worked out between the parties involved assuming property lines are well drawn out, and transaction costs aren’t too high, but in this case the 3rd party is too large, and the individual effects are too small. Because it involves so many people in a small way, nobody would take action against it, so this is an example where government interaction would be beneficial.
These regulations could have the exact outcome they want, but not necessarily in the way they wanted. These regulations would push up prices for power plants and could make it harder to conduct business, which could shut some of them down, which would decrease coal burned, and push producers towards coal substitute goods, such as natural gas. It would also decrease the amount of emissions from existing ones through better carbon pollution capturing equipment.
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