If X transferable emissions permits are issued and there are n potential polluters,
A) the government must initially assign each of the potential polluters X/n permits.
B) the government must assign X/n permits to each potential polluter and check periodically that those permits have not moved.
C) emissions will be the same whether or not the permits are split equally, so long as none of the permits are issued outside the group.
D) emissions will be the same no matter who receives them first, so long as the recipient is willing and able to participate in the permit market.
E) emissions will be less if the permits are given initially to firms with lower abatement costs.

Question

Quizplus · Accepted Answer

Transferable emissions permits allow for flexibility in who holds them, as the total emissions are capped by the number of permits issued, not by who initially receives them. This system relies on the market to allocate permits efficiently, meaning emissions will be consistent with the total permits available, regardless of initial distribution.

If X Transferable Emissions Permits Are Issued and There Are