The Control of an Externality in a Tradable Permits System

The control of an externality in a tradable permits system has three components. The first component ________.

A) is allowing parties to respond to incentives by choosing the most efficient means of abatement
B) is providing incentives for abatement by internalizing the cost of the harm done by the pollution.
C) involves reflecting in the prices of goods and services, the costs of abatement and the social costs of the harm from the remaining pollution.
D) is allowing states to decide how best to decrease dangerous air pollution in the most cost effective manner.