What is an advantage of using a transferable pollution right over a pollution tax?
A) The government can legislate the method of abatement.
B) The government receives less revenue from the tax.
C) Consumer prices won't rise.
D) Governments don't need information on the cheapest abatement strategy.

Question

Quizplus · Accepted Answer

Transferable pollution rights allow firms to trade the right to pollute, enabling those who can reduce pollution more cheaply to do so and sell their rights. This system does not require the government to know the most cost-effective pollution abatement strategies, as the market will naturally find the most efficient allocation of pollution reduction efforts.

What Is an Advantage of Using a Transferable Pollution Right