Final answer:
Market-oriented tools for reducing pollution, including pollution taxes, tradable permits, and subsidies, provide flexible and cost-effective alternatives to address the rigidity, lack of incentive for innovation, and expense associated with command-and-control regulations.
Step-by-step explanation:
Market-oriented tools for reducing pollution offer alternative solutions to command-and-control (CAC) regulation by responding to concerns in more flexible and economically efficient ways. These tools include pollution taxes, tradable permits, and subsidies for pollution reduction.
- Pollution Taxes - These incentivize companies to reduce emissions to save on taxes, addressing concerns about the rigidity of CAC regulations and promoting cost-effective pollution control.
- Tradable Permits - By creating a market for emission permits, this approach allows companies that can reduce emissions more cheaply to sell their allowances to others, encouraging innovation and efficiency.
- Subsidies for Pollution Control - Financial incentives for companies to invest in cleaner technology can address the strictness of CAC regulations while helping industry adopt new and more effective pollution-control measures.
These market-oriented tools address complaints about CAC by introducing flexibility and cost-saving measures for businesses. They encourage environmental responsibility while fostering innovation and economic effectiveness.