Firms buy and sell the right to pollute:

Question

Quizplus · Accepted Answer

Firms buy and sell the right to pollute under a system of transferable pollution permits. This system is also known as cap-and-trade, where a set amount of pollution is allowed and permits are traded among firms for the right to emit pollutants up to that limit. This encourages firms to find ways to reduce their pollution levels and rewards those who are able to emit less than their allotment, as they can sell their unused permits to other firms.

Firms Buy and Sell the Right to Pollute