An advantage emission taxes and permits have over direct controls is that the former
A)work well even if pollution output cannot be accurately measured.
B)can respond quickly to new information about the dangers of particular pollutants.
C)make it in firms' interests to reduce pollution in the most efficient manner possible.
D)reduce pollution to zero.

Question

Quizplus · Accepted Answer

Emission taxes and permits create a financial incentive for firms to reduce pollution in the most efficient manner possible, as they will want to minimize their costs of complying with the regulations. This is a more flexible approach compared to direct controls which prescribe specific technologies or actions that firms must take to reduce pollution, and may not be as cost-effective. While emission taxes and permits may require accurate measurement of pollution output, they can still work reasonably well through estimates or models. Additionally, emission taxes and permits can be adjusted to respond to new information about the pollution or its risks, but they do not necessarily reduce pollution output to zero.

An Advantage Emission Taxes and Permits Have Over Direct Controls