ECS2606 ASSIGNMENT 1
SEMESTER 2 - 2022
, 1. Suppose there is a river on which are located several micro-breweries, each of
which discharges pollutants into the water. Suppose somebody invents a new
technology for treating this waste stream that, if adopted by the breweries, could
substantially diminish emissions. What are the impacts of this invention on:
(a) The actual level of emissions
Impact of adoption of new technology on the actual level of emission:
In the vicinity of a river there is a setup of several paper mills. Each paper mill disposes its
wastes into the river. Assume that, new technology is introduced in the production process
of these paper mills, which will reduce the emission level of each mill substantially.
Due to use of this new technology in the production process the actual level of emission
from each mill would decrease. However, the ambient quality of water of this river might be
the same as it was before the use of new technology in the production process.
(b) The efficient level of emissions
Impact of adoption of new technology on the efficient level of emission:
Impact of adoption of new technology in production process of these mills, depends on the
ambient costs and damage costs associated with it. Introduction of new technology in the
operation of these mills will reduce the abatement cost of these mills. Reduction in the
abatement costs of each mill would shift the respective marginal abatement cost curve
inwards or downwards.
Reduction in emission from each mill due to use of this new technology in the production
process would also reduce the respective damage costs. Reduction in damage costs of each
mill would shift the respective marginal damage cost curve inwards or downwards.
However, efficient level of emissions of theses mills depends upon relative change in their
abatement costs and damage costs. If, the reductions in marginal abatement costs are same
as the reductions in marginal damage costs, then there would be no change in the efficient
level of emissions of these mills.
1
SEMESTER 2 - 2022
, 1. Suppose there is a river on which are located several micro-breweries, each of
which discharges pollutants into the water. Suppose somebody invents a new
technology for treating this waste stream that, if adopted by the breweries, could
substantially diminish emissions. What are the impacts of this invention on:
(a) The actual level of emissions
Impact of adoption of new technology on the actual level of emission:
In the vicinity of a river there is a setup of several paper mills. Each paper mill disposes its
wastes into the river. Assume that, new technology is introduced in the production process
of these paper mills, which will reduce the emission level of each mill substantially.
Due to use of this new technology in the production process the actual level of emission
from each mill would decrease. However, the ambient quality of water of this river might be
the same as it was before the use of new technology in the production process.
(b) The efficient level of emissions
Impact of adoption of new technology on the efficient level of emission:
Impact of adoption of new technology in production process of these mills, depends on the
ambient costs and damage costs associated with it. Introduction of new technology in the
operation of these mills will reduce the abatement cost of these mills. Reduction in the
abatement costs of each mill would shift the respective marginal abatement cost curve
inwards or downwards.
Reduction in emission from each mill due to use of this new technology in the production
process would also reduce the respective damage costs. Reduction in damage costs of each
mill would shift the respective marginal damage cost curve inwards or downwards.
However, efficient level of emissions of theses mills depends upon relative change in their
abatement costs and damage costs. If, the reductions in marginal abatement costs are same
as the reductions in marginal damage costs, then there would be no change in the efficient
level of emissions of these mills.
1
