Under the European system of carbon emissions caps:

Question

Quizplus · Accepted Answer

Under the European system of carbon emissions caps, industries are allocated a certain number of permits to emit carbon dioxide. If a company emits less than its allowance, it can sell its surplus permits to other companies that are exceeding their emissions cap. This creates a market for carbon permits and incentivizes companies to reduce their emissions, as they can profit from selling excess permits. Choices A, C, and D do not accurately describe the system, as it does not involve a one-time fee for unlimited pollution, incentivize investment in pollution-generating technology, or reduce the marginal private costs of pollution for firms.

Under the European System of Carbon Emissions Caps