The advantage of selling pollution permits rather than using a fixed-percentage reduction for all firms is
A) that government raises additional revenue.
B) that reductions in pollution are accomplished by those firms that can do so at least cost.
C) that enforcement costs are eliminated.
D) that pollution is driven to zero.
E) an increase in the benefit to pollution reduction.

Question

Quizplus · Accepted Answer

Selling pollution permits allows for market forces to determine which firms should reduce pollution, as those that can do so at the least cost will buy up permits and those that it is more expensive for will not. This leads to a more efficient and cost-effective solution than a fixed-percentage reduction for all firms.

The Advantage of Selling Pollution Permits Rather Than Using a Fixed-Percentage