A government program where permits are issued for a maximum allowable amount of pollution and those permits can be bought and sold is called:
A) a corrective tax.
B) a corrective subsidy.
C) cap and trade.
D) nontradable pollution permits.

Question

Quizplus · Accepted Answer

Cap and trade is a system where the government sets a limit (cap) on the total amount of pollution that can be emitted and allows companies to buy and sell permits to emit a certain amount of pollution. This system incentivizes companies to reduce their emissions in order to sell their excess permits.

A Government Program Where Permits Are Issued for a Maximum