A cap and trade program is efficient because the cap protects the environment while:
A) generating substantial revenues for the government.
B) keeping compliance and administration costs relatively low.
C) while requiring the same response by each polluter.
D) none of above

Question

Quizplus · Accepted Answer

A cap and trade program sets a limit (or "cap") on the total amount of emissions that are allowed, and permits (or "trades") can be bought and sold between polluters to meet their individual emission targets. This approach encourages companies to find the most cost-effective ways to reduce their emissions, while allowing flexibility in how they accomplish this goal. This leads to lower compliance and administration costs, as well as incentivizing innovation and further reduction in emissions. While some cap and trade programs may generate revenues, this is not the primary goal or benefit of the system. Similarly, the response required of each polluter may vary based on their individual circumstances and chosen strategies.

A Cap and Trade Program Is Efficient Because the Cap