Which issue of pollution control do tradable pollution permits not address?

Question

Quizplus · Accepted Answer

Tradable pollution permits do not address the issue of reducing pollution taking place in the informal sector of the economy, which is not regulated or monitored by the government. Tradable permits only apply to regulated firms and industries, and the permits are traded within a set overall pollution limit determined by the government. Tradable permits do provide incentives for firms to produce output in a less pollution-intensive manner and can generate revenue for the government by selling permits. They also reveal the value of the right to pollute and allow the government to set an overall pollution level.

Which Issue of Pollution Control Do Tradable Pollution Permits Not