Key points

• Command-and-control regulation sets specific limits for pollution emissions and/or mandates that specific pollution-control technologies that must be used.
• Although such regulations have helped to protect the environment, they have three shortcomings: they provide no incentive for going beyond the limits they set; they offer limited flexibility on where and how to reduce pollution; and they often have politically-motivated loopholes.

Command-and-control regulation

Self-check question

Review questions

• What is command-and-control environmental regulation?
• What are the three problems that economists have noted with regard to command-and-control regulation?

Critical-thinking questions

• Would environmentalists favor command-and-control policies as a way to reduce pollution? Why or why not?
• Consider two ways of protecting elephants from poachers in South Africa. In one approach, the government sets up enormous national parks that have sufficient habitat for elephants to thrive and forbids all local people from entering the parks or injuring either the elephants or their habitat in any way. In a second approach, the government sets up national parks and designates 10 villages around the edges of the park as official tourist centers that become places where tourists can stay and embark on guided tours inside the national park. Consider the different incentives to local villagers—who often are living in poverty—in each of these plans. Which plan seems more likely to help the elephant population?