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By Robin W. Bates

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Environmental Protection Agency. Page ix Alternative Policies for the Control of Air Pollution in Poland Abstract Like other Central European countries, Poland faces the twin challenges of improving environmental quality while also promoting economic development. This study examines the cost of achieving alternative emission standards and the savings in abatement cost that might be achieved with policies that rely on economic incentives rather than with rigid command and control measures. The focus is primarily on three pollutants arising from energy combustionparticulate matter (PM), nitrogen oxides (NOx), and sulphur dioxide (SOx)although carbon dioxide (CO2) emissions also are tracked.

Now suppose that S1 is the aggregate marginal cost curve for energy supply, with some set of environmental standards applied to the large stationary sources included in the optimization model. The area under the curve S1 out to the new consumption level Q1, Area (A+E), is the new value of the objective function in the optimization. The difference between the two values of the objective function thus is Area (A) minus Area (F). If we add to this the amount P0(Q0Q1) = Area (F+C), the value of reduced energy use at the original price P0, the result is Area (A+C).

The social cost in that figure is represented as Area (A+B+C). Suppose first that S0 represents the aggregate marginal cost curve of energy supply in the Base Case, without newly instituted controls. The area under S0 out to the Base Case consumption level Q0, Area (E+F), is the Base Case value of the objective function being minimized in the optimization model described above. Now suppose that S1 is the aggregate marginal cost curve for energy supply, with some set of environmental standards applied to the large stationary sources included in the optimization model.

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