Which of the following is an example of a market based system for pollution control?
A) Taxes on emissions
B) Subsidies for abatement
C) Transferable discharge permits
D) Deposit refund programs

Question

Quizplus · Accepted Answer

Transferable discharge permits is a market based system where the government sets a limit on the amount of pollution that can be emitted and issues permits to firms allowing them to emit a certain amount. Firms can then buy and sell these permits with each other, leading to a market for pollution permits. This creates an incentive for firms to reduce their pollution levels and sell any unused permits, while allowing more efficient firms to purchase permits and continue emitting. Taxes on emissions (A) and subsidies for abatement (B) are command and control approaches, where the government directly sets the tax rate or provides funding for pollution reduction, while deposit refund programs (D) incentivize behavior change by offering financial incentives for returning items for recycling.

Which of the Following Is an Example of a Market