The ability of marketable pollution permits to efficiently lower the level of pollution is dependent on the initial allocation of the permits.

Question

Quizplus · Accepted Answer

The efficiency in lowering pollution levels through marketable pollution permits is primarily due to the market mechanism allowing permits to be bought and sold, not the initial allocation. This system incentivizes reductions where they are most cost-effective, regardless of the initial distribution of permits.

The Ability of Marketable Pollution Permits to Efficiently Lower the Level