One reason a cap and trade system works well is that

Question

Quizplus · Accepted Answer

A cap and trade system sets a limit (or cap) on emissions and then allows companies to buy and sell allowances to emit within that limit. This creates a market incentive for companies to find the most cost-effective ways to reduce emissions, leading to overall emission reductions at the lowest possible cost. This incentive for cost-effective controls is the main reason why a cap and trade system is effective. The other options (A, C, and D) are not necessarily true and only provide limited benefits. For example, if allowances are inexpensive (A), then there may not be enough pressure on companies to reduce emissions. If unused allowances expire (C), then there may be unpredictable fluctuations in the market. And if allowances cannot be traded (D), then there is no flexibility and companies may not be able to find the most cost-effective solutions.

One Reason a Cap and Trade System Works Well Is