Question

Violation of the Clean Air Act, including the knowing release of refrigerant during the maintenance, service, repair, or disposal of appliances, can result in fines up to ________.

1) $10,000
2) $25,000
3) $50,000
4) d) $100,000

Answer 1

A violation of the Clean Air Act regarding the release of refrigerant during appliance maintenance can result in fines up to $100,000. This is an economic tool to prevent environmental damage and ensure that manufacturers account for pollution costs, akin to a pollution charge or tax.

Step-by-step explanation:

Violation of the Clean Air Act, including the knowing release of refrigerant during the maintenance, service, repair, or disposal of appliances, can result in fines up to $100,000. This penalty serves as an economic disincentive, similar to a pollution charge, to ensure compliance with environmental regulations and to discourage harmful practices that lead to air pollution.

Applying the principles of environmental economics, if refrigerator manufacturers had to internalize the external costs of pollution—for example, paying $100 for the additional costs of harm caused by pollution per refrigerator produced—it would lead to an increase in production costs and an upward shift in the supply curve.

Furthermore, if a firm faces a substantial pollution tax, such as $1,000 for every 10 pounds of particulates emitted, it would be incentivized to reduce emissions if the cost of doing so (such as $900) is less than the tax itself, illustrating the intent behind setting high penalties for environmental violations.