¥Advantages:
–internalize external costs if charges
are close to estimated marginal
external costs
–costs passed along to ultimate
consumer
–encourage reduction of resource and
pollution to optimum levels
–collected changes may be used to
generate tax revenues & pay for
abatement/prevention facilities
–a positive, preventative, pro-active
incentive approach rather than
remedial, after the fact compensation strategy
–lower transaction costs
–allow fees to reflect increasingly
scarce resources
–can cope with economic growth vs
environment