When there are substantial differences among sources and technologies in terms of the costs of reducing greenhouse gasses, the use of __________ is more cost effective than the use of _____________.
A) incentives; fines
B) fines; incentives
C) incentive based policies; command and control policies
D) command and control policies; incentive based policies

Question

Quizplus · Accepted Answer

When there are substantial differences in costs, incentive-based policies are more effective than command and control policies. This is because command and control policies tend to be uniform and inflexible, which can result in inefficient outcomes. In contrast, incentive-based policies allow for flexibility and innovation, which can lead to cost savings and improved environmental outcomes. Additionally, fines are unlikely to be effective when there are large cost differentials among sources, as the highest-cost sources may simply choose to pay the fine rather than reduce their emissions. Incentives, on the other hand, provide a financial reward for emissions reductions, regardless of the cost differential among sources.

When There Are Substantial Differences Among Sources and Technologies in Terms