Emission taxes provide less incentive for firms to conduct R&D to find cheaper ways to reduce emissions than standards.

Question

Quizplus · Accepted Answer

Emission taxes create a greater incentive for firms to find cheaper ways to reduce emissions because if they can reduce their emissions below the tax level, they can save money. In contrast, standards only require firms to meet a specific level of emissions without providing an extra financial incentive for innovation.

Emission Taxes Provide Less Incentive for Firms to Conduct R&D