Assume that the federal government determines the total level of pollutants that can be discharged by city industries.A city is able to buy and sell the rights to this total discharge level with other cities.This example illustrates a(n):
A)emissions tax.
B)Pigouvian tax.
C)tradable emissions permit.
D)environmental standard.

Question

Quizplus · Accepted Answer

This scenario describes a tradable emissions permit system where a total level of pollutants is set and industries in the city are allowed to buy and sell permits to stay within the limit. This approach incentivizes firms to reduce their emissions and rewards those who are able to reduce their emissions at a lower cost than others.

Assume That the Federal Government Determines the Total Level of Pollutants