Table of Contents:

• Title
  
• Incentive Regulation
  
• Examples of Incentive Regulation
  
• More Examples of Incentive Regulation
  
• Command-and-Control Regulation (C and C)
  
• Example of C and C Regulation: Clean Air Act of 1970
  
• Marketable Allowance Systems
  
• Pollution Taxes
  
• Structure of Allowance Trading Systems
  
• Illustrative Case 1: C and C Regulation
  
• Table: Hypothetical Marginal Abatement Costs by Firm
  
• Diagram: Industry Marginal Abatement Cost Curve
  
• Table: Cost of Cutting Emissions by 1/2 Using Traditional C and C Regulation
  
• Illustrative Case 2: Fully Marketable Allowances
  
• Table: Cost of Cutting Emissions by 1/2 Using Fully Marketable Allowances
  
• Discussion of Cost Savings From Tradable Allowances
  
• More Discussion on Cost Savings
  
• Illustrative Case 3: Limited Allowance Trading
  
• Table: Cost of Cutting Emissions by 1/2 Using Limited Allowance Trading
  
• Diagram: Cost Comparision, Cases 1 and 2
  
• Advantages of Allowance Trading Systems
  
• Disadvantages of Allowance Trading Systems
  
• Policy Experiment in Allowance Trading: The EPA's Acid Rain Program
  
• Description of the Science of Acid Rain Formation