ECS2606
ASSIGNMENT 2 (SEMESTER 2)
DUE DATE: 20 September 2024
Written Assignment Submission Guidelines:
Please ensure that your assignment is submitted electronically through the myUnisa platform no
later than …20 September 2024. Kindly note that fax or email submissions will not be accepted.
NB: Assignment submitted to the lecturer(s) through email will not be considered.
QUESTION 1
1. Discuss the different incentive-based policies which are available in environmental economics.
[10]
ANSWER:
Incentive-Based Policies in Environmental Economics
Incentive-based policies in environmental economics aim to encourage environmentally friendly
practices through economic incentives rather than through direct regulation. The primary
incentive-based policies include:
1. Pollution Taxes (Pigovian Taxes):
These taxes are levied on the quantity of pollution that firms emit. The goal is to internalize
the external costs of pollution, making it more expensive to pollute and thus encouraging
firms to reduce emissions.
2. Tradable Permits (Cap-and-Trade Systems):
The government sets a cap on the total level of pollution and issues permits that firms can
ASSIGNMENT 2 (SEMESTER 2)
DUE DATE: 20 September 2024
Written Assignment Submission Guidelines:
Please ensure that your assignment is submitted electronically through the myUnisa platform no
later than …20 September 2024. Kindly note that fax or email submissions will not be accepted.
NB: Assignment submitted to the lecturer(s) through email will not be considered.
QUESTION 1
1. Discuss the different incentive-based policies which are available in environmental economics.
[10]
ANSWER:
Incentive-Based Policies in Environmental Economics
Incentive-based policies in environmental economics aim to encourage environmentally friendly
practices through economic incentives rather than through direct regulation. The primary
incentive-based policies include:
1. Pollution Taxes (Pigovian Taxes):
These taxes are levied on the quantity of pollution that firms emit. The goal is to internalize
the external costs of pollution, making it more expensive to pollute and thus encouraging
firms to reduce emissions.
2. Tradable Permits (Cap-and-Trade Systems):
The government sets a cap on the total level of pollution and issues permits that firms can
