Major categories of market-based instruments include

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All of the above are major categories of market-based instruments. Pollution charges involve a fee or tax on the amount of pollution emitted by a firm or individual. Subsidies can be used to encourage the adoption of cleaner technologies or practices. Deposit/refund systems involve requiring a deposit on products that produce waste and providing a refund when the product is returned for recycling or disposal. Pollution permit trading systems allow firms to buy and sell permits that allow them to emit a certain amount of pollution, creating a market for pollution permits.

Major Categories of Market-Based Instruments Include