Transferable pollution rights allow a given level of pollution reduction to be achieved:
A)at zero cost.
B)at higher cost than compliance standards.
C)at lower cost than compliance standards.
D)at higher cost than a system of pollution taxes.

Question

Transferable pollution rights allow a given level of pollution reduction to be achieved:
A)​at zero cost.
B)​at higher cost than compliance standards.
C)​at lower cost than compliance standards.
D)​at higher cost than a system of pollution taxes.

Quizplus · Accepted Answer

Transferable pollution rights create a market for pollution permits where firms can sell their excess permits to other firms who have exceeded their limit. This can lead to a lower overall cost of achieving a given level of pollution reduction, as firms with lower abatement costs can sell their permits to firms with higher abatement costs, reducing the overall cost of compliance. Therefore, transferable pollution rights can provide a cost-effective approach to environmental regulation compared to traditional command-and-control regulations or pollution taxes.

Transferable Pollution Rights Allow a Given Level of Pollution Reduction