A system of tradable air pollution permits has the advantage of
A)reducing the total amount of air pollution.
B)eliminating all environmental liability for participating polluters.
C)rewarding efficient abatement effort at the expense of inefficient abatement efforts.
D)ensuring that the goal amount of abatement occurs at the lowest social cost.

Question

Quizplus · Accepted Answer

Tradable permits create an economic incentive for each polluter to reduce their emissions, and the market determines the price of the permits. This ensures that the goal amount of abatement occurs at the lowest social cost, as polluters can choose to either reduce their emissions or purchase permits from others who have reduced their emissions more efficiently. This system rewards efficient abatement efforts at the expense of inefficient abatement efforts, which ultimately reduces the total amount of air pollution. However, participating polluters are not completely relieved of environmental liability as they still have to comply with regulatory limits and penalties for non-compliance.

A System of Tradable Air Pollution Permits Has the Advantage