Which of the following is most consistent with a government policy toward pollution as suggested by the Coase theorem?

Question

Quizplus · Accepted Answer

The Coase theorem suggests that property rights and the ability to negotiate can result in efficient solutions to environmental issues. Tradable permits for pollution provide an economic incentive for firms to reduce their pollution levels and can result in more efficient outcomes compared to strict controls or determining which firms can or cannot pollute. Imposting a tax on producers that pollute can also be a effective policy, but it does not necessarily guarantee an efficient outcome as it does not take into consideration the specific circumstances of each individual firm. Nationalizing industries that pollute is not consistent with the Coase theorem as it involves government intervention in the market.

Which of the Following Is Most Consistent with a Government