Many people like the idea of tradeable emissions permits because they represent what is effectively a market solution to a market failure. There are costs of monitoring and enforcement similar to those with direct controls. It isn t possible to reduce pollution in the area of any specific firm it the firm has a high cost of reducing pollution it will buy a permit and continue to produce pollution. All of the above are regulatory agencies that address the market failures caused by asymmetric information. If certain types of information about product safety and safety int eh workplace are considered public goods, there is an economic rational for the government to intervene in the market to produce that information.
Most regulation goes beyond the provision of information.
The government typically imposes standards that firms are required to meet. This involves monitoring and enforcement costs on the part of regulators. In theory, the provision of perfect information such lead the market to the allocatively efficient outcome. Safety standards can free workers and consumers from the task of trying to make difficult calculations they are ill-equipped to make. In this case, standards can increase efficiency.