Both emissions taxes and tradable emissions permits:

Question

Quizplus · Accepted Answer

Both emissions taxes and tradable emissions permits aim to reduce pollution in a cost-minimizing manner by creating economic incentives for polluters to reduce their emissions. By internalizing the external costs of pollution, these market-based approaches can lead to more efficient outcomes than traditional command-and-control regulations. They do not necessarily require accompanying environmental standards, although such standards can complement and reinforce the effectiveness of the market-based mechanism. Both methods discourage more pollution, as the polluters have to pay for their emissions or purchase permits, providing an economic disincentive to emit more.

Both Emissions Taxes and Tradable Emissions Permits