Under a system of marketable pollution permits
A) firms with lower costs of reducing emissions are likely to sell permits to those with higher costs of reducing emissions.
B) environmentalists can decrease pollution by purchasing permits.
C) the government can decrease the amount of pollution to the desired level.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

Under a system of marketable pollution permits, firms with lower costs of reducing emissions can indeed sell their permits to those with higher costs, allowing for cost-effective pollution reduction. Environmentalists can also participate in the market by purchasing permits, effectively reducing the total number of permits in circulation and thus decreasing pollution. Additionally, the government can control the total amount of pollution by adjusting the number of permits issued, ensuring that pollution levels are maintained at a desired threshold.

Under a System of Marketable Pollution Permits