Which of the following is true when emission charges are compared to emission standards?
A) Polluters pay both emission charges and abatement cost charges under a policy of emissions charges, but only pay for abatement costs when emission standards are in place.
B) Polluters automatically reduce their emissions when abatement costs decline under a policy of emissions charges, but do not reduce their emissions automatically when standards are in place and abatement costs decline.
C) Polluters will realize bigger pollution control cost reductions from R&D efforts under a policy of emission charges than under a policy of emission standards.
D) all of the above.

Question

Quizplus · Accepted Answer

A) This is true as polluters have to pay for both the emissions charge and abatement cost under an emissions charge policy, while they only pay for abatement costs under emission standards.
B) This is true as polluters have an incentive to reduce emissions if it is more cost-effective to do so under an emissions charge policy, but they do not have the same incentive under emission standards.
C) This is true as an emissions charge policy incentivizes polluters to invest in R&D to reduce emissions because they can reduce their emissions and pay less in charges. Emission standards do not necessarily provide the same incentive.

Which of the Following Is True When Emission Charges Are