Which of the following is a limitation of the Command and Control approach in environmental economics?
It may result in higher compliance costs for industries, potentially affecting their competitiveness. Explanation: The Command-and-Control approach in environmental economics, while effective in setting specific regulations and standards for environmental pollution control, has certain limitations. One such limitation is that it can impose higher compliance costs on industries. Under this approach, industries are legally obligated to meet the prescribed environmental standards, which may require significant investments in pollution control technologies or practices. These compliance costs can be substantial and may affect the competitiveness of industries, particularly in comparison to industries operating in countries or regions with less stringent environmental regulations. The higher costs associated with compliance can potentially lead to the relocation of industries to areas with less strict regulations, resulting in a phenomenon known as "pollution havens." This limitation highlights the need to strike a balance between environmental protection and the economic viability of industries when implementing the Command-and-Control approach.
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