乔纳森·格鲁伯-财政学（第五版）gruber_5e_lecture_slides_ch05.pptxVIP

Copyright ? 2010 Worth Publishers 5.1 Externality Theory5.2 Private-Sector Solutions to Negative Externalities5.3 Public-Sector Remedies for Externalities5.4 Distinctions Between Price and Quantity Approaches to Addressing Externalities5.5 ConclusionExternalities: Problems and Solutions 5Heather Luea and Dan SacksP R E P A R E D B Y Introduction to Externalities: Global Warming5In 1997, representatives from over 170 nations met in Kyoto, Japan, to negotiate an international pact to limit the emissions of carbon dioxide.Carbon dioxide emissions contribute to global warming, which could cause enormous damage.The cost of reducing the use of fossil fuels, particularly in the major industrialized nations, is immense—perhaps 10% of GDP for the United States. Average Global Temperature, 1880?2014 5 Externalities: Problems and Solutions5Global warming is a classic example of an externality, which is a kind of market failure.Externality: Externalities arise whenever the actions of one party make another party worse or better off, yet the first party neither bears the costs nor receives the benefits of doing so.Market failure: A problem that causes the market economy to deliver an outcome that does not maximize efficiency. Negative Externalities5.1Negative production externality: When a firm’s production reduces the well-being of others who are not compensated by the firm.Pollution from steel production, dumped in a river, hurts fishermen.Negative consumption externality: When an individual’s consumption reduces the well-being of others who are not compensated by the individual.Smoking at a restaurant affects the health and enjoyment of others. 5.1Negative production externalities drive a wedge between private and social marginal cost.Private marginal cost (PMC): The direct cost to producers of producing an additional unit of a good.Social marginal cost (SMC): The private marginal cost to producers plus any costs associated with the production of the good that are imposed