CoolU has solved its smoking problem by allocating each student 5 smoking permits a day,and allowing trading.This is an example of
A)cap-and-trade.
B)emission charges.
C)the Coase theorem.
D)a pollution tax.
E)a voucher.

Question

Quizplus · Accepted Answer

Cap-and-trade is a system where a cap is set on the total amount of pollution allowed, and permits are then allocated to polluters. The polluters can then trade these permits among themselves, allowing those who can reduce pollution more efficiently to sell their surplus permits to those who find it more expensive to reduce their emissions. This system incentivizes pollution reduction as a means of earning money through permit sales, and CoolU's system of allocating permits and allowing for trading is an example of this.

CoolU Has Solved Its Smoking Problem by Allocating Each Student