Tradeable allowances:

Question

Quizplus · Accepted Answer

Tradable allowances are an efficient way to reduce pollution at lower costs because they enable firms to buy and sell pollution permits based on their individual pollution levels. This creates a market-based system where the total pollution is reduced to the pre-determined cap, while allowing firms to find the most cost-effective means of complying with regulations. This results in reduced pollution at a lower cost compared to traditional command-and-control regulations.

Tradeable Allowances