The Clean Air Act of 1990 provided for the use of buying and selling of pollution permits to combat acid rain. What type of policy instrument does this describe?
A) market incentives
B) public education
C) privatization
D) subsidies

Question

Quizplus · Accepted Answer

The buying and selling of pollution permits is an example of a market-based approach to environmental policy, which uses economic incentives to encourage polluters to reduce emissions. By allocating permits to pollute a certain amount, but allowing companies to buy and sell those permits, a market for pollution is created. Companies that can reduce their emissions less expensively than buying a permit can sell their permits to those who can't. This creates an economic incentive for companies to reduce pollution, as reducing pollution would allow them to sell their permits for a profit.

The Clean Air Act of 1990 Provided for the Use