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Public Policy Approaches to the Control of Pollution

. . and letting the market do the rest, the control authority can achieve a cost-effective allocation" (378). He argues that this system "substantially reduces compliance costs . . . for existing sources and therefore causes smaller increases in prices," thus increasing "equity as well as efficiency" (561).

Krupnick and Portney say that "benefit-cost analysis is used by economists to identify, quantify, and weigh the advantages and disadvantages of public policies designed to increase society's well-being" (422). As the Trans-Alaska Pipeline (TAP) case illustrates, the calculations involved are very complex and involve a great deal of uncertainty, what Krutilla and Fisher call "a problem having monumental imponderables" (262). The TAP project involved a policy decision as to the best way to transport to the United States oil extracted from the huge proven reserves in the North Slope of Alaska. Cicchetti compared the economic benefits of TAP with the environmental costs associated with the alternative, a Trans-Canadian Pipeline System (TCP). He argued that on economic grounds, the TAP project was inferior to TCP. Cichetti pointed out that TAP had many economic deficiencies, as compared with TCP. He said that "the TAP route would deliver to California [where an oil glut was developing] the type of crude oil best suited to the Midwest's market" and that it would do so at a much higher cost than would the TCP system (The Route Not Taken, 41). He pointed out that many of the oil companies' financial projections were based on public subsidies and tax breaks and that TAP was designed to "take advantage of complex U.S. laws regarding the import, export, and ocean transportation of oil" (The Wrong Route 5). He also argued that since extensive gas deposits in Alaska were likely to be found, as in fact proved to be the case, it would have been more economical to expand existing Canadian pipelines than to develop a pipeline system in Alas...

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