Tradable pollution permits are a(n):
A)tax system for internalizing pollution costs to the market.
B)subsidy system for charging consumers for the use of common property resources.
C)system of voluntary negotiations between polluters and damaged parties.
D)organized exchange of licenses that enable the holder to pollute up to a specified amount during a given period.

Question

Quizplus · Accepted Answer

Tradable pollution permits are a system of organized exchange of licenses that enable the holder to pollute up to a specified amount during a given period. They allow for market-based solutions to pollution by assigning a price to pollution and creating a market for trading permits. They are not a tax system (A), subsidy system (B), or system of voluntary negotiations (C).

Tradable Pollution Permits Are A(n)