According to the dual-control approach, states set abatement levels for existing stationary sources below the EPA-administered standard for new sources. The "new source bias" associated with this approach is that
A) firms have an incentive to shut down their businesses
B) states have an economic motive to set very stringent standards for existing sources
C) firms have an incentive not to start new construction and instead remain in older, existing facilities
D) the EPA has an incentive to set lenient standards for new sources

Question

Quizplus · Accepted Answer

The dual-control approach creates a bias towards existing facilities because states set abatement levels for these sources below the standard for new sources. Therefore, firms have an incentive not to start new construction and instead remain in older, existing facilities which do not have to comply with as stringent standards. This is known as the "new source bias".

According to the Dual-Control Approach, States Set Abatement Levels for Existing