When government attempts to reduce the global warming effects caused by the burning of fossil fuels such as oil, coal, and natural gas by establishing a minimum level of fuel efficiency on new cars, it is using a(n):
A)environmental standard.
B)emissions tax.
C)Pigouvian tax.
D)tradable emissions permit.

Question

Quizplus · Accepted Answer

The government is setting a standard for the minimum level of fuel efficiency on new cars in order to reduce the global warming effects caused by burning fossil fuels. This is an example of an environmental standard. It is not a tax, therefore options B and C are not correct. Option D, tradable emissions permit, involves a market-based approach to reducing emissions, which is not being implemented in this scenario.

When Government Attempts to Reduce the Global Warming Effects Caused