Sunday, December 19, 2010

Adjusting the demand curve

New data on the amount of emissions has pushed the Air Resources Board in Los Angeles to lower emissions standards. Usually shifts in this direction come from the business community asking for help, but this time seems different (though the cries for help are also there, which is no surprise given the economy). Environmentalists oppose the move, saying that externalities are still larger than is being acknowledged. It's always tough to find an equilibrium when the market's not there to help.

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