Which of the following statements about abatement subsidies is NOT true?
A) Environmental groups dislike abatement subsidies because they appear to reward polluters.
B) Governments like abatement subsidies because they are relatively inexpensive to implement.
C) Abatement subsidies are popular with firms.
D) Abatement subsidies create perverse incentives for firms to increase emissions when their base levels are being set.

Question

Quizplus · Accepted Answer

Governments may not necessarily find abatement subsidies inexpensive to implement; the cost-effectiveness can vary widely depending on the specific design and scope of the subsidy program. Abatement subsidies can sometimes be costly, especially if they are set at levels high enough to incentivize significant changes in behavior or technology.

Which of the Following Statements About Abatement Subsidies Is NOT