Which of the following is a way of how the government runs a system of marketable pollution permits?
A)picks a target pollution level
B)oversupplies the market with permits
C)prohibits the trading of permits
D)all of the above.

Question

Quizplus · Accepted Answer

The government sets a target pollution level, which is the maximum amount of pollution allowed in a certain period of time. The number of pollution permits issued is then based on this target level. This ensures that the overall level of pollution stays within acceptable limits. Oversupplying the market with permits would defeat the purpose of the system, and prohibiting the trading of permits would also limit the flexibility of companies to find the most cost-effective ways to reduce their emissions.

Which of the Following Is a Way of How the Government