Final answer:
A command-and-control policy is a regulatory approach that sets specific limits on emissions or mandates specific technologies for pollution control. It is often criticized for being inflexible and not incentivizing firms to exceed standards, leading to suggestions that market-oriented tools might be more effective. An example of command-and-control is regulations limiting NOx emissions from diesel vehicles.
Step-by-step explanation:
A command-and-control policy is a type of regulation that sets specific limits for pollution emissions and/or mandates specific pollution-control technologies that firms must use. For example, regulations that limit Nitrous Oxide (NOx) emissions from diesel vehicles are a form of command-and-control policy, as they dictate the maximum amount of NOx that can be emitted from a vehicle's exhaust. This approach to regulating pollution requires all producers to adhere to the same standards, often with little flexibility regarding how to achieve these standards, and tends to lack incentives for firms to exceed them.
However, command-and-control regulation can be inflexible as it generally applies the same standards and technology requirements to all polluters, regardless of the varying levels of difficulty and cost they may experience in meeting those standards. Critics advocate for market-oriented tools as a more flexible and potentially more effective approach to reducing pollution, because these tools can incentivize firms to innovate and reduce emissions beyond the required standards.
As an illustration of command-and-control in action, the Volkswagen scandal revealed that vehicles were designed to cheat pollution tests, emitting up to a million extra tons of NOx per year. This demonstrates the necessity for stringent monitoring and enforcement of such policies.