"In a first step toward setting firm guidelines on the monitoring of emissions from factory-style farms, the U.S. Environmental Protection Agency has reached agreement with 20 farms to collect air samples. In return, noncompliant operations will pay EPA a one-time fine ranging from $200 to $100,000. Ultimately, 2,681 Animal Feeding Operations (AFOs)- representing some 6,700 farms in 42 states will sign similar deals."
-Engineering News-Record (Feb. 13th, 2006)
The article is a look into a first step into controlling air pollution in a previously unmonitored industry. The policy is looking at air pollution as a negative externality. The EPA is charging a “one-time” fee for violators. This could pose a long-term environmental problem due to the fact that violators only would have to pay the fee one time, yet be allowed to continue to pollute at their previous quantity. A Coase Theorem policy might have better long-term results considering the negative externality. As it stands, all firms are operating at zero liability for their actions. The Coase Theorem would push firms into having more liability. It will be interesting to see how this problem will evolve.