Pollution rights may be traded if
A) polluters try to hide pollution.
B) administrators are uncertain about Pigouvian taxes.
C) there is no market for pollution.
D) pollution is harmless.

Question

Quizplus · Accepted Answer

Trading pollution rights is a market-based approach to controlling pollution that can be more flexible and cost-effective than traditional regulation, especially when there is uncertainty about the optimal level of a Pigouvian tax, which is designed to correct the negative externality of pollution.

Pollution Rights May Be Traded If