Abstract
A simple model is presented which demonstrates that emission standards can either reduce or increase the distortions inherent in preregulatory relative prices. This model is used in conjunction with data for controlling air pollution in the St. Louis airshed under a least-cost set of emission standards. By applying a heuristic formula, it is concluded that this set of standards is distortion neutral. Although there is reason to believe that conventional emission standards are distortion reducing, it is clear that Pigouvian fees achieve technical efficiency in abatement as well as the elimination of price distortion.
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