Suppose that there are two firms, each generating three tons of SO 2 . Suppose also that the government has set a target abatement level of two tons. Under a policy of uniform abatement with permits each firm would receive
A)two non-transferable pollution permits.
B)two pollution permits which they could sell to each other.
C)one pollution permit with a value equal to that firmʹs cost of abating one ton of SO2.
D)one pollution permit with a value equal to the market price for a pollution permit.

Question

Quizplus · Accepted Answer

Under a policy of uniform abatement with permits, each firm would receive two non-transferable pollution permits.

Suppose That There Are Two Firms, Each Generating Three Tons