Economics » Environmental Protection and Externalities » Command-and-Control Regulation

Key Concepts and Summary

Key Concepts and Summary

Command-and-control regulation sets specific limits for pollution emissions and/or 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.

Glossary

command-and-control regulation

laws that specify allowable quantities of pollution and that also may detail which pollution-control technologies must be used

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