visions is the new regulatory approach. The 1970 provisions utilized the traditional command-and-control approach, in which the government regulations set uniform standards for all businesses and specified the methods and, frequently, the equipment to be used in compliance (Stavins & Whitehead, 1992, p. 8). The market-based approach, on the other hand, establishes and monitors the overall pollution level in a given area; the government then provides financial incentives whereby the costs imposed upon business cause an entire industry or region to reduce its aggregate pollution to the desired level (Stavins & Whitehead, 1992, p. 9). The government focuses on the environmental goals while businesses focus on the technical means of achieving those goals (Stavins & Whitehead, 1992, p. 10).
There are two problems with the command-and-control approach which have arisen since 1970. First, the method tends to be expensive, both to business and society. Uniform standards can force some businesses to use unnecessarily expensive means of pollution control; the cost of controlling emissions can vary greatly between businesses and the right technology for one business may be the wrong technology for another. Second, the command-and-control approach tends to freeze the development of pollution-control technologies because there is little incentive for businesses to reduce emissions much below the levels set by the government (Stavins & Whitehead, 1992, p. 9).
Conversely, the market-based approach encourages businesses to share the cost of
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