Trading of permits may lead to geographical concentration of polluting activities.

Question

Quizplus · Accepted Answer

Trading of permits can lead to geographical concentration of polluting activities because companies in areas with lower abatement costs may choose to sell their permits and continue polluting, while companies in areas with higher abatement costs may find it more economical to buy permits rather than reduce emissions, leading to a concentration of pollution in certain areas.

Trading of Permits May Lead to Geographical Concentration of Polluting